| Last | Change | Percent | |
| S&P Futures | 2067.1 | 5.3 | 0.26% |
| Eurostoxx Index | 3221.4 | 27.2 | 0.85% |
| Oil (WTI) | 76.04 | -0.5 | -0.61% |
| LIBOR | 0.233 | 0.000 | -0.02% |
| US Dollar Index (DXY) | 88.21 | -0.097 | -0.11% |
| 10 Year Govt Bond Yield | 2.33% | 0.02% | |
| Current Coupon Ginnie Mae TBA | 104.4 | -0.2 | |
| Current Coupon Fannie Mae TBA | 103.5 | -0.1 | |
| BankRate 30 Year Fixed Rate Mortgage | 3.98 |
Stocks are higher this morning on speculation that the ECB will take further measures to boost growth. Bonds and MBS are down.
This is a short week with the Thanksgiving holiday. Friday will be an early close in the bond market. We have a lot of data on Tuesday and Wednesday.
Economic growth moderated in October, according to the Chicago Fed. Production-related indicators were negative, while employment-related indicators were positive.
Even as the Fed ends QE, the demand for sovereign debt remains insatiable. J.P Morgan is forecasting demand for sovereign debt will exceed supply by $400 billion in 2015 as worldwide business confidence drops and inflation remains nowhere to be seen. This has been largely a European phenomenon, however the laws of relative value will affect US bonds as well. Note that US Treasuries yield more than the G7 average, by a lot. In fact, it has risen from flat to 77 basis points since the Fed announced it would end QE in mid-2013. We are approaching levels not seen since 2006. The upshot? Demand for European debt will keep a bid under Treasuries. In other words, the environment remains suitable for continuing low rates. Interesting that pretty much every strategist on the Street has gotten this one wrong.
Fun fact: Of the PIIGS, Italy, Ireland, and Spain yield less than the US. Only Portugal and Greece yield more. It makes you wonder if the Fed and the ECB have created a monster - a sovereign debt bubble.
Chart: Treasury spread to G7 debt. (in other words, the 10-year yield minus the average 10 year bond yield for the G7 countries).
Obama says that "Americans will want that new car smell and someone that doesn't have as much mileage as me." FWIW, Hillary will have quite the amount of mileage on her, as she will be pushing 70 in 2016. But she smells nice, I guess.
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