Some Opening Comments November 28 2008

November 28th, 2008 7:55 am | by John Jansen |

Prices of Treasury coupon securities registered mixed results in overnight trading. Since a body in motion tends to stay in motion the recent trend of flattening of the yield curve remained in force as short maturities posted modest yield increases while longer maturities posted modest yield declines.The yield on the 2 year note has increased one basis point to 1.10 percent. The yield on the 3 year note has edged higher by one basis point to 1.37 percent. The yield on the 5 year note slipped one basis point to 2.01 percent. The yield on the 10 year note tumbled nearly four basis points to a paltry 2.94 percent. The yield on the 30 year bond fell 3 basis points to 3.49 percent. (The yield on the 10 year bond is the lowest in modern bond market history and the yield on the 390 year remains a whisker away for the 3.45 percent low attained in a panicky trade a week ago.)

The 2 year/ 10 year spread is 184 basis points.

The 2 year/5 year/30 year spread has narrowed to just 57 basis points.

Economic data released overnight was uniformly weak.

Data in Japan manifested a deepening recession. Factory output fell 3.1 from September and household spending slid 3.8 percent. Companies plan to cut output by over 6 percent this month.

Panasonic slashed its full year earnings forecast by 90 percent citing a huge drop in demand for flat screen TVs.

In New Zealand home building approvals slumped to a record low in October.

European inflation slowed the most in two decades as it fell to 2.1 percent in November from 3.2 percent in October.

European unemployment rose to its highest level since January 2007 as it increased to 7.7 percent form 7.6 percent.

Bloomberg reported, also, that as we were eating turkey yesterday European confidence fell to 15 year lows and retail sales fell the most in 5 years.

The US bond market will close at 200PM today and there is no meaningful economic data on tap.

Today is month end and with the extensions to the index the flattening trade should gain some additional momentum.

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  1. One Response to “Some Opening Comments November 28 2008”

  2. By Jill on Nov 28, 2008 | Reply

    This article in Euromoney explains the absolute seriousness of the “failure to deliver” problem, Clearly, Paulson is not doing his job. He has a huge conflict of interest, IMHO.

    http://tinyurl.com/faildeliver

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