Mortgage bond prices opened higher Monday morning adding to the gains
seen Friday afternoon. Rates are finding support from weak stock
futures, an indication the Dow will open lower.
The much
anticipated Greek election is finally over. The pro-bailout group, The
New Democracy’s won the election helping calm global worries. Stocks
shot higher in Asia and Europe on the hopes Greece will be able to form a
collation government. This remains to be seen. If Greece is unable to
do so another election will be held. This story is far from over.
Spain
is back in the crosshair of the bond vigilantes. Yields on the
beleaguered country’s 10-year bond shot to 7.15% before backing off.
Yields in Italy are also under pressure. 7% on 10-year money is
considered unsustainable and has driven other countries into a
full-blown bailout. The bottom line is Europe remains a mess and this
weekend’s events only kicked the can further down the road. Europe
needs to make some bold moves quickly to keep the union together.
With
no data set for release today traders are waiting for stocks to begin
trade at 9:30 am ET to help gauge interest rate direction. At the bond
market opening the Dow futures were down 44.
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