April 15. Stronger than expected Retail Sales
Retail Sales were stronger than expected +1.6. After Bernanke comments which affirmed low rates, the back end of the curve sold off; curve steepened. Red/gold pack spread was up 5.75. At one point golds were -10. Ten year yield rose 4.5 bps to 3.855%.
–Several news items today suggest foreclosures are again starting to rise. A piece on zerohedge had some rough calculations: 6 million households that don’t pay for their mortgages (but haven’t yet been foreclosed) amounts to $8 billion per month of extra cash flow. Of course one might think that’s $8 b of cash inflow that others don’t receive, so net effect is zero, but FNM and FRE guarantee those cash flows. So its like a stealth stimulus program.
–Implied vol in eurodollars continues to slide; straddles down 1-2 bps.
–A lot of news and Fed speakers today. Empire State expected 25.0. Job Claims expected 440k. Industrial Production expected +0.8% as inventories are re-built. Philly Fed expected 20.0.
