Daily Market Update 3/13/09

Interest rates moved generally higher Friday, although mortgage-backed securities outperformed Treasuries. Treasury bonds were rocked by comments from Chinese Premier Wen Jiabao expressing concern about a possible decline in the US dollar. The Chinese government holds large amounts of US debt, the value of which would deteriorate as the dollar falls. If the Chinese were to purchase fewer US securities, rates would likely move higher. In economic news, the Trade Deficit fell more than expected to the lowest level in six years as import prices (excluding oil) declined 0.6%. Consumer Confidence rose unexpectedly in February. Stock prices gained for the fourth consecutive day. Next week’s economic calendar includes Capacity Utilization on Monday, the Producer Price Index Tuesday, and the Consumer Price Index Wednesday.

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