Market Update: Treasury Auctions Weigh On Market

The $72 billion of Treasury auctions this week have been weighing on the markets. The 10-year auction had a weaker bid to cover ratio which caused bonds to end down on the day yesterday. In economic news, jobless claims fell last week to the lowest level since July. Also, the total number of people collecting unemployment benefits fell to the lowest level since 11/08. The trade balance report showed that the trade deficit narrowed as a drop in the dollar pushed exports to the highest level in 2 years. Last, the Fed will release the schedule of its next round of treasury purchases at 2PM EST today.

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Market Update – Fed Hopes Lowering Long-Term Costs For Consumers Will Boost Economy

Bonds are down as the market continues to digest the news of the Fed’s larger than expected QE2 stimulus plan. The sale of three-year notes begins today with 10-year notes on Tuesday and 30-year bonds on Wednesday. The Fed hopes that lowering the long-term costs for businesses and consumers will help boost the economy which is still facing an unemployment rate of 9.6%.

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Market Update – Unemployment Rate Remains Unchanged Despite Job Growth

It was expected that non-farm payrolls were going to rebound from the dip experienced in September. Estimates were that non-farm payrolls grew by 60,000 last month. The actual number showed growth of 151,000, while the unemployment rate remained unchanged at 9.6%, as expected. This is applying minimal pressure to bonds as the figures may not be strong enough to prevent yields from falling further.

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