Daily Commentary by Larry Baer:
After another week of confusion and turmoil in Europe, global investors are abandoning whatever hopes they had for a near-term conclusive solution to the euro-zone's debt crisis.
Disaster may have temporarily been averted when Greece, under heavy pressure from other members of the European Union, chose to form a new government in a last ditch effort to stave off bankruptcy. But that event did little to calm global investors as Italy now begins to stagger under crushing debt loads and domestic political unrest. Look for the "flight-to-quality" flow of capital out of Europe and into the relative safe-haven of dollar denominated assets like Treasury debt obligations and agency eligible mortgage-backed securities to continue to support relatively steady mortgage interest rates here at home.
Looking ahead to the coming week - Uncle Sam will be in the credit markets looking to borrow a total of $72 billion in the form of 3- and 10-year notes together with an offering of 30-year bonds. $32 billion of 3-year notes will go on the auction block on Tuesday followed by $24 billion of 10-year notes on Wednesday. The auction series will round out with $16 billion of 30-year bonds on Thursday. If the European debt drama is still at full throttle (a high probability assumption) - the coming U.S. debt supply will not likely have much impact on the current level of mortgage interest rates.
The balance of the week will see nothing but a few second tier economic reports hit the news wire before traders close the doors on Friday in observance of the Veteran's Day Holiday.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
