Treasury 10-year note yields held near a one-month low amid a rise in crude oil and concern that mortgage-related losses at financial firms will widen. Oil advanced after a U.S. government report showed a bigger-than-forecast decline in inventories. Freddie Mac and Fannie Mae fell after Fannie sold $3 billion in notes at higher yields than in past offerings. Many strategists believe that rising oil is going to affect consumption, it's going to affect earnings, so it's going to affect financial institutions' ability to recover.
Mortgage Bonds had a great day on Tuesday which allowed most lenders, to issue improved mid-day pricing. The rally has continued this morning, at least mildly, as the Fannie Mae 6.00% coupon is improved by 12 basis points. The 10 Year Treasury Note is currently yielding 3.88% ( this is good for 30 year Mortgages, because most are tied to this rate) while stocks are in the red by 30 points in early trading. Tomorrow we'll hear from the Labor Department with their weekly report on initial unemployment claims and that's about it for this week's economic calendar. I suspect now that Q2 is behind us, most traders will be taking their cues from corporate earnings reports during the next several days... GE will report on Friday and their numbers are generally considered a strong indicator for the economy.
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