Gotta love volititlity

Mortgage bond prices remain lower mid-morning Monday erasing the small gains seen Friday afternoon. In news released this morning, factory orders fell 0.6%. Expectations were for orders to rise 0.1%. That data was sharply weaker than expected and bond friendly. With no more news set for release today traders will spend the day watching stocks and headline news to help gauge interest rate direction. At the 10:00 am ET price point the Dow was down 24. Stocks in Europe and Asia are trading lower as well. Europe continues its slow burn. Pressure is building on German to allow the issuance of Euro Bonds. Over the weekend Germany began sending signals that it may be willing to lift their objection however the mechanics of issuing the bonds would be extremely complex. It may even require changes to the EU treaties that would have member states cede power over budgets and other policy. The differences between northern and southern Europe are like night and day. In Greece you get to retire at 52, Germany 67. One German put it this way “make me understand why I should support any financial assistance to Greece when they get to retire 15 years before I can”. He has a point.