Tomorrow looms rather large in terms of Fed Reserve influence. The main things to watch for are obviously details of operation twist and also any talk of ending the 25% interest rate currently paid to banks for excess reserves. As far as the latter notion saw a little bit of new buying in Oct. 100 calls yesterday.
Bond prices did pull back from yesterdays over bought levels and – believe it or not the trend has remained down in 10’s – basically since about a month ago. Fundamental news out of Europe continues to keep price action volatile but so far major trend in terms of asset allocation into equities noted several weeks ago seems to be holding.
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