Rates are sharply down today, most entirely on news out of the Euro zone. The reality that the EU has not solidified the financial support terms with Greece, is unsettling the market, and now spreading to other countries, notably (right now) Portugal. The event is bringing scrutiny on several of the other countries to evaluate whether or not they might follow Greece. Spain, Italy, and Portugal, are under the microscope.
And when this happens, investors tend to take money out of those investment vehicles. And the hard news is, when that happens, interest rates to that country go up, and it indeed increases the costs to that country’s economy: which then puts them into the very situation people feared.
On the domestic front, in the Case-Shiller index, US home prices rose less than forecast in February; so all of this news works to bring cash into bonds (increasing the price/reducing the interest rates.)
Although I would like to flesh out more of this, I’m running late for an appointment that will last much of the day, and wanted to get this out earlier. Perhaps I’ll edit this later on, if not too late.
If it were me, I would float today. There is no news at this moment that would drive interest rates up today.
