4/13/10

Most rate prices are improved today as mortgage bonds are not able to hold onto all of Monday’s gains. MBS and Treasuries both made further gains in early morning trading but have since began to sell off as the day trading practices of pre-Fed intervention resume. Stocks are down too as the Dow is unable to hold onto the 11,000+ closing mark it reached yesterday for the first time since September 2008 off of poor earnings from Alcoa. Greater volatility will mean unexpected moves up and down, probably more violently than in the past year. This is no place for complacency as the fundamentals point to higher rates sooner than later and inter-day re-prices will surely increase. In news released today, the nation’s trade deficit widened more than expected and March import prices rose less than expected. However, the price action in this morning’s market appears to be driven more by profit taking than data. Fed speak resumes today with discussions of financial regulation and literacy.