Some Opening Comments October 31 2008

October 31st, 2008 7:27 am | by John Jansen |

Prices of Treasury coupon securities rebounded in overnight trading as the market breathed a sigh of relief that this initial round of supply from the Treasury has been tucked away by dealers and investors. Monetary ease and a stock market decline in Japan helped, too. In Europe, inflation slowed to 3.2 percent YOY from 3.6 percent and unemployment remained steady at 7.5 percent. Those reports fanned the hope that the ECB would slash short rates as much as 50 basis points at its upcoming meeting.

The yield on the 2 year note declined 2 basis points to 1.54 percent. The yield on the 5 year note dropped 8 basis points to 2.75 percent. The yile on the benchmark 10 year note tumbled 8 basis points to 3.89 percent and the yield on the Long Bond fell 7 basis points to 4.26 percent.

The 2 year/10 year spread narrowed 8 basis points to 235 basis points.

Stocks in Tokyo dropped 5 percent overnight as a slump in economy has led companies to slash earning estimates. Mitsubishi UFJ (proudly a part owner of former investment bank Morgan Stanley) and Mizuho slashed forecasts as bad loan expense rises. Nikon and Mazda foresee lower earnings and slashed forecasts.

UK bank Barclays avoided the UK bailout program and borrowed nearly $12 billion from a variety of sources in the Middle East. They will pay as much as a usurious 14 percent for some of the funding.

There is quite a bit of data in the US today with ECI, personal income and spending, Michigan sentiment and Chicago purchasers on the docket.

I am sorry I was away from the corporate headquarters yesterday but I am back in the saddle today.

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  1. One Response to “Some Opening Comments October 31 2008”

  2. By Storm Petrel on Oct 31, 2008 | Reply

    Welcome back to HQ. Your comments were missed yesterday.

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