Since we have all the euphoria of the “China Deal” behind us I guess there is no reason to drive interest rates higher (at least that is what the 10 year treasury is saying).
Previous to today when the “China Deal” came to the forefront rates would spike a few basis points higher as the talking heads would have us believe this is going to make GDP move bunches higher–something I don’t buy. Maybe the Chinese buy more from us–and maybe they don’t, but they can promise anything and do nothing–we will wait and see. Rates drifting lower tells me there are a lot of folks that are NOT buying the Chinese deal story.
The 10 year is now at 1.79%–off almost 3 basis points.
The FED REPO this morning was a $47.5 billion deal–the FED took Treasuries as collateral in the amount of $26.5 billion and $21 billion in agency mortgage collateral.
With a fairly large calendar of ex dividends yesterday we are seeing just a slight amount of give back in $25 baby bonds and preferreds stocks. 47 income issues went ex yesterday. Overall the average price is off 2 cents while investment grade preferreds are off 5 cents–maybe folks are tired of paying sky high prices for 4.75% coupons–I doubt it really.