Rates are relatively stable today, mostly on continuing European news. The dual thoughts are: the EU intervention has stemmed the challenges; and the other is that it has not. (That’s real helpful, right?) Anyway, rates are mostly trading sideways, although we’re getting close to a “technical point” that may signal a rise in rates. See the below.
The ECB (European Central Bank) is beginning to slow down on the assistance purchases of Greek, Spanish and Italian bonds, perhaps indicating that they feel that they’ve sufficiently stabilized the market. (Although it also is holiday in much of Europe.) Conventional wisdom is still that the nearly $1 billion won’t be enough to contain the difficulties; and thus, money continues to remain in US financial vehicles (notes, bonds.)
Technically, the corrective action this week brings us back to the support level of 3.63%. A bounce above 3.63% will signal a reversal in trend that will move higher; and a move closing below 3.43% will be necessary to signal a trend toward 3.33%. Currently, support numbers are at 3.43 and 3.41%; and resistance numbers are at 3.63 and 3.66%.
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