Why have rates been heading higher the past few days? Is the economy really doing better?
After 9 days on a run down, the market rests, gains a little strength and then heads lower.
Overnight in Tokyo, US Treasury prices were lower, and rates higher, after a stronger-than-expected GDP number from Japan , which caused Asian stocks to rally. This followed a day in the US where the curve continued to steepen, which has continued this morning.
In the US yesterday, we had a strong Retail Sales number, followed by this morning's Trade Balance numbers ($58.8 billion deficit, slightly narrower than expected) and Jobless Claims (-9k from 357k to 348k, and continuing claims steady, but at their highest level in 2 ½ years). All eyes will be on Fed President Bernanke when he testifies before the Senate Committee later today. Oil prices are on the rise, back into the low $90/barrel range. Here comes $100. The 10-yr has moved about 3.75%, and mortgage prices are worse by .375.
Also UBS mentioned they have another 27Billion in Subprime to look at writing off......
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