Morning Miscellany

March 30th, 2009 10:52 am | by John Jansen |

Market participants went home for the weekend with a view that three main factors would influence trading this week and that none would disturb the newly discovered equanimity.

However, participants awoke on Monday morning to an Obama Administration with a harsh bankruptcy leaning attitude toward the auto companies, a G 20 in a disarray and the Secretary of the Treasury bad mouthing banks.

Stocks had recently rallied significantly and the confluence of these factors precipitated the sell off in equities today.

Some risk aversion has crept back into the fixed income market but it is not rampant. Treasury yields are down but they are well off the low end of the range. In recent Treasury rallies associated with the Federal Reserve’s quantitative ease program,the 10 year note has broken into the 2.50s and high 2.40s. At this moment it has barely pierced the 2.70 level.

I think there is some hesitancy to act until the details of the long end buy back are available shortly after 1100AM New York time.

Corporate bond spreads are wider by about 5 basis points for industrial names and 5 basis points to as much as 20 basis points for financial names.

The Verizon 10 year which priced last week at T + 388 and traded into the 390s is 378 bid this morning.

Swaps spreads are unchanged to 1 basis point tighter.

Agency spreads are unchanged in the 2 year sector and 5 year sector and a basis point tighter in the 10 year sector.

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  1. 3 Responses to “Morning Miscellany”

  2. By koval on Mar 30, 2009 | Reply

    What were those 3 factors? Consumer Confidence, ISM and Non-farm Payrolls?

  3. By John Jansen on Mar 30, 2009 | Reply

    Koval,

    i guess I wrote that poorly. I think the assumption was that G20 would be stimulative, banks were fine for now and the government would pony up for the autos.

  4. By John Jansen on Mar 30, 2009 | Reply

    Koval,

    i guess I wrote that poorly. I think the assumption was that G20 would be stimulative, banks were fine for now and the government would pony up for the autos.

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