Posted by: cfigueira | June 15, 2010

Mortgage bond prices

Mortgage bond prices are positive this morning following warnings of further European economic weakness. Economist Nouriel Roubini warned of additional risk of a double dip recession in the Euro zone. Roubini said Spain is worse in some ways because unemployment there has reached 20 percent, where Greece’s rate was only 10 percent. If Spain falls that would be “a disaster.” Moody’s downgraded Greece government bond ratings yesterday to junk territory. Euro and US stocks retreated yesterday afternoon after the announcement. We will see how things progress on that front in trading today. So far the Euro and stocks are holding steady. Stocks and bonds often trade inversely, though not always the case. This morning the DOW is currently up 80 points. Expect more of the same up and down trading. The Treasury announced that China increased their US debt holdings in April. The data is a little old but still helps alleviate some concerns of a Chinese repositioning. There is no data today. We have inflation data later in the week. Look for mortgage bonds to play off of stock and oil prices.

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