The 10 year treasury closed at 4.84% yesterday and is trading at 4.86% right now–I expect the trading day will see movement in a very narrow range. Tomorrow we get the 3rd quarter gross domestic product (GDP) report–the forecast is for +4.7% which is plenty strong. I pray for a lower number–not dramatically so, just a few 1/10ths below forecast. A number above forecast will kick the 10 year back to 5% and of course we follow the GDP number on Thursday with the personal consumption expenditures (PCE) on Friday–Katy bar the door if that number is hot.
Checking CDs yesterday I see that 5.8% (1 year callable) from JPM is available on both eTrade and Fido – probably from others as well. I still think there are relatively high odds we see 6%–the economic news the next 2 days will go a long way in determining the CD rates.
It is nice to see crude oil (west Texas) trading in the $84 area. Various folks predicting a softening economy is helping to keep traders and speculators tamed – not that these folks (Gross and Ackman) are renowned forecasters, but whatever works is fine with me. Only 1 month ago WTI was trading around $95/barrel–the implications for future inflation when oil sky rockets are ominous–let’s keep things under control.
Well we have little economic news today – just new home sales which is coming at 9 a.m. and this will not be a market mover to any degree – so we await tomorrow and Friday for true economic moving data.