July 25.
July 25. Lack of a budget/debt ceiling agreement is creating market uncertainty, though it mostly seems to be reflected in gold (new high
$1617) and yen strength. Moody’s downgraded Greece again.
–For all the handwringing and disaster scenarios about the possibility of a US default, ten year notes won’t move much higher than 3%, closing Friday at 2.96. Stocks opened lower, but still remain well above the halfway point of July’s range. There have been articles about the Fed’s contingency planning for a US default, which can only mean another flood of liquidity. Of course, according to Bernanke such an action will only
support paper markets rather than products like oil and grains.
–Chicago Fed Index today expected -0.40 vs -0.37. Dallas Fed Mfg Index expected -5.6 from -17.5.
