Treasuries bounced around with stocks today but finished down slightly. The two-year finished down 6/32, and the ten-year was lower by 12/32. The flattening trend continued today as the benchmark curve flattened by 6 basis points, to end the day at +247 bps.The Treasury will auction $19 billion in 10-year notes and $11 billion in 30-year bonds this week offset by only one Fed purchase on Wednesday.
Thirty-year fixed mortgage rates have risen to 5.35%, the highest level since November 25. It was well understood that the market could not sustain 4.75% mortgages for very long, so the sudden jump is not completely unexpected. 5%-5.5% looks like a range that the market can sustain for a while, barring any expansion in the Fed’s quantitative easing campaign, which I think is unlikely at this point.
Have a great evening.
Cliff J. Reynolds Jr., Junior Analyst
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