Treasury’s and Inflation

10-Yr Yields sliced through the 3.55% resistance like a hot knife through butter despite good news that the gov’t was able to sell additional debt. Next resistance to look out for will be 4.1%. Two factors could send rates lower once again: 1) a return to risk aversion (which I believe will be the case); or 2) the Fed could make an announcement that it will increase it’s Quant Easing program. Whatever happens, letting rates increase will effectively make the housing recovery a failure.

Meanwhile, oil just keeps trudging higher on inflation expectations, not fundamentals and should set up for a large move down in the coming days/weeks.

Keep these market moves in mind though…we will see more of the same come the end of the year on our way towards commodity based inflation –stagflation.

Advertisements
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s