Mortgage bond prices remain higher mid-morning Wednesday adding to the
gains seen Tuesday afternoon. Rates are finding support from weak
stocks.
In news released this morning, new home sales stood at
343K vs. the expected 339K. That data was near expectations and had
little effect on trade.
Traders will spend the day watching
headline news and stocks as they wait for the results of the Treasury
auction this afternoon. The Treasury will auction $35B of 5-year notes
with results by 1:15 pm ET. Lets hope the 5’s go as well as the 2’s did
yesterday. At the 10:00 am ET price point the Dow was down 66-points.
Europe: Global equity markets took a tumble after former
Greek premier Lucas Papademos said it was possible that preparations
were being made for Greece's exit from the euro. He spoke of the
catastrophic consequences to both Greece and Europe should Greece either
decide to leave the euro zone or be kicked out. His comments only
confirm what others in the business world have been saying for months.
Following the previous election in May, Greece was unable to form a
collation government and will hold another election on June 17th. Here
is the rub, if the anti-austerity groups win more seats in June, which
currently appears likely, this would only further inflame the issue.
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