6/15/10

This morning mortgage bonds grind higher and tighter with Treasuries. Initially negative off of stronger stocks and euro, Treasuries have since turned positive despite a Dow up over 100-points. Economic releases today indicated lower inflation, improved manufacturing, strong demand for US assets and weak builder confidence post tax credit. More trouble from Europe as an EU report cites growing concern over Spain and Portugal, a plunge in German investor confidence and another downgrade of Greek debt. Nevertheless, both stock and bond markets are in the green but Bonds appear to be under some pressure as this goes out.