SubscribeDaily Futures Commentary May 11, 2009
Monday, May 11, 2009
Now that the bank stress tests, the unemployment report and the Treasury auctions are out of the way, traders are likely to return their focus to interest rates this week.
Yields have been rising lately driving June Treasury Bonds and June Treasury Notes lower. This has also helped push mortgage rates back over 5%. The Fed is concerned about the higher mortgage rates so it is preparing to buy back several billions of dollars of mortgages this week.
I think that mortgage rates are higher than the Fed is comfortable with so it may begin to increase its aggressiveness in the government asset buyback program. If mortgage rates get too high then the housing recovery could stop in its track and erase some of the gains beginning to show in this economy.
Look for Treasury bonds and notes to rise this morning and perhaps all week based on the strong buying from the Fed.
Equity futures are under pressure overnight. Money is leaving the stock market to be reallocated into the Treasury markets. Traders are attempting to lock in the guaranteed higher government yields …
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[...] News Sources wrote an interesting post today onHere’s a quick excerptMonday, May 11, 2009Now that the bank stress tests, the unemployment report and the Treasury auctions are out of the way, traders are likely to return their focus to interest rates this week. Yields have been rising lately driving June Treasury Bonds and June Treasury Notes lower. This has also helped push mortgage rates back over 5%. The Fed is concerned about the higher mortgage rates so it is preparing to buy back several billions of dollars of mortgages this week. I think that mortgage rates [...]