Interest rate markets opened a little weaker this morning but still the 10 yr is holding well under 2.70% (2.65% at 9:00). MBS prices in early trading generally unchanged in early activity. The Russia/Ukraine situation is roiling a little but still has not set markets into any kind of major selling or buying treasuries. There is a big meeting coming later this week between all the parties and NATO members; Ukraine is calling for UN peace keeping troops but that will not happen because Russia has ultimate veto power.
Janet Yellen speaking in Stone
Mountain Georgia (Atlanta) said our big banks
may need more capital, implying that banks’ source of funding may be at risk
during a financial crisis. The Basil Committee on bank regs is suggesting more
capital for banks is needed. Central bankers continue to sweat more capital for
banks, we wonder why after the recent increases in capital that have pushed
banks to avoid proprietary trading and about every other risk that might be
conceived of. Are central banks beginning to worry they have no more real
effective bullets to use if the global economy slips? Yellen said staff members
at the Fed “are actively considering additional measures that could address
these and other residual risks in the short-term wholesale funding markets.”
Interest rate market are holding
positive technicals but the bellwether 10 yr has very hard resistance at 2.60%;
it functions as a brick wall when the yield falls. MBS markets also still hold
positive technical readings but won’t have the impetus to improve much unless
the 10 can somehow crack 2.60%. To do so in the present environment it
will take more selling in the equity markets. I remain very skeptical that the
stock market can hold at these near record highs, however with nowhere to turn
to make any kind of return the stock market does have solid support engineered
by the Federal Reserve and other major central banks.
No comments:
Post a Comment