Market Update – Second Round of Quantitative Easing Anticipated

Yesterday, mortgages held strong on the prospect of a second round of quantitative easing and on the strength of the 5-year notes auction which drew the lowest yield since the government began quarterly sales of the securities. No real economic news is scheduled for release today, but we have a 7-year note auction at 1 p.m. and three Fed speakers on tap.

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Market Update – Fear of Downgrade of Spanish and Irish Debt

Treasuries rallied yesterday ahead of the $36 billion 2-year note auction which received the highest demand in more than 3 years. This morning, we have some negative headlines coming from fear of a downgrade of Spanish and Irish debt. In economic news, the S&P home price index showed that home prices in 20 U.S. cities rose at a slower pace in July compared to a year earlier. The September consumer condidence report is expected to show a decline.

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Market Update – Speculation of Slowed Growth in September

Treasuries are up this morning as market participants speculate this week’s manufacturing report will show that growth slowed in September. This week’s key economic reports include Tuesday’s July S&P home price index and September’s Consumer Confidence, unemployment and GDP numbers on Thursday, along with Friday’s ISM manufacturing index.

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