Faster than a speeding bullet. More powerful than a locomotive. Able to leap tall buildings in a single bound. Look! Up in the sky! It’s a bird. It’s a plane. It’s a Central Banker! and in them the markets continue to trust to cure all ills or at least make it seem like it. The ECB is now getting the market pressure to ‘do something’ in order to facilitate the bailing out of bondholders. At 8:30 we’ll see if the ECB capitulates, sterilizes and reintroduces any new longer term funding facilities. Spain successfully sold 3 yr notes with the likely help of their large banks at a yield of 3.72% vs 2.53% in the one in Oct and the 10 yr yield spread to German Bunds is narrowing by 15 bps and now almost 50 bps in the past two days. The 10 yr Treasury yield is touching 3% for the 1st time since July and Bankrate.com said the avg 30 yr mortgage rate rose another 9 bps last night to 4.66%, a 5 month high. Nothing is for free.
