Rates are lower today and bond prices are rising due to increased sovereign debt worries revolving around Ireland and other debt laden and trouble nations within the EU. Although the US is still in very deep economic trouble and laboring under an astronomical and growing sovereign debt load of its own and actually rivaling and surpassing many of the trouble nations in Europe in that regard, market attention has whipsawed back to the mess in the EU and will serve to push the dollar higher and rates lower as investors and money managers run to relative safety (total illusion) of US government debt. Economic data is very light today in anticipation of a heavy release of info Tuesday and Wednesday before the Thanksgiving holiday. It would appear that the PIIG nations (Portugal, Ireland, Italy and Greece) are running into a debt wall and one by one requesting a bailout from the European Central Bank (ECB), the International Monetary Fund (IMF) and World Bank. Ireland relented and asked the ECB for the bitter bail out pill this morning with Italy, Portugal and Spain teetering on the brink. The cost will be massive for the ECB and will continue to push investors back into dollar denominated assets until the US has another negative economic or geopolitical headline event herding the sheep investors back into the EURO. What a mess! Treasury prices moved higher off the news with mortgage bonds following suit. Both seem to be holding fairly well so far this morning but given the last few days of incredible market volatility we shouldn’t be surprised by anything that this market may throw at us.
Economic News Today:
- - Treasuries rallied, as Moody’s appears ready to downgrade Ireland after ECB bailout plan acceptance
- - US commercial real estate prices jumped most on record
- - Portugal reiterates commitment to debt repayment as social unrest rises
- - Irish bonds rise as its government requests ECB/IMF emergency bailout funds
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