Thursday, May 24, 2012

No News is good News

Mortgage bond prices opened lower Thursday morning adding to the losses seen Wednesday afternoon. Rates are under pressure from positive stock futures and no supporting headline news from Europe.

In news released at the open, weekly jobless claims printed at 370K and continuing claims, a summation of all receiving benefits, at 3,260K. Expectations were for initial claims to fall 5K to 365K and continuing claims to fall 15K to 3,250K.

Orders for durable goods rose 0.2% vs. the 0.3% increase analysts had expected.

The data released this morning was near expectations.

Traders are now waiting for stocks to begin trade at 9:30 am ET to help gauge interest rate direction. The Treasury will complete this week’s auctions with the sale of $29B of 7-year notes this afternoon.

Not too much changed in Europe overnight. Governments and banks are now openly talking of the mechanics of a Greek exit should that occur. If the objections from other member states to issuing Euro Bonds could be overcome, how exactly would the issuance take place, which country would be responsible in case of default etc? Europe is looking for plan B.

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