Jan 4, 2011.
Jan 4, 2011. US interest rate futures rallied back from steep losses to close nearly unchanged. Selling pressure was evident just prior to ISM, which was strong at 57.0, though after the actual data was released buyers took over, one of which was the NY Fed with a large Permanent Open Mkt Op. The next two days feature smaller POMO’s, with $1-2 bill in TIPS today and $1.5 to 2.5 bill of 18 to 20 year maturities tomorrow.
–Copper set a new high. Gold and silver were strong in the morning but silver especially had a large reversal and is lower yet this morning. However, stocks held on to gains. Over a longer timeframe, stocks have only gone sideways when priced in gold since lows in 2008. (See chart).
–Red/green pack spread notched another new high at 112.5 bps. Been a strong trend higher, as in late November this spread was 64 bps. Red/green/blue butterfly has rallied from around -15 to +15. I think this fly has gotten a bit ahead of itself.
–Reuters “Roughly 1.53 million consumer bankruptcy petitions were filed in 2010, up 9 percent from 1.41 million in 2009…” Highest in five years. This is an example of consumer “deleveraging”, not intentional, but forced. On the other hand, losses are marked and it allows for a fresh start.
