Halloween Trading

October 31st, 2013 8:04 am | by John Jansen |

Prices of Treasury coupon securities have rebounded from the post FOMC malaise which produced a  swift rate rise. In the belly of the Treasury curve rates are lower by about 2 basis  and the curve has partially erased some of the flattening against the belly which was the hallmark of the afternoon sell off (5s 30s 234.1 versus 232.5 and 10s 30s 111.3 versus 110.5). Dealers reported better buying in the belly overnight and it appears that central banks on various continents were better buyers.

Several factors motivated the buyers. Some thought that the initial response to the FOMC statement was exaggerated and thought new levels were attractive. Equities were weak in Asia but are just mixed in Europe. Economic data in Europe released overnight are supportive of lower yields with weakness in German retail sales and confidence and a disappointing European unemployment report.

In the US the focus will be on Initial Claims at 830AM and the Chicago Purchasing manger Survey at 945AM. Today is month end and there is the usual month end extension though the one note I read said that it was modest.


Be Sociable, Share!

Post a Comment