Wednesday – September 30th, 2009

  • ECB Lends Banks $110 Billion in Second 12-Month Auction to Increase Credit: Bloomy
  • Europe Consumer Prices Dropped More Than Economists Forecast in September: Bloomy
  • Mortgage Demand Falls Despite Lower Rates: CNBC
  • Wal-Mart Supersizes Its $10 Holiday Toy Program: CNBC


Buy the rumor sell the fact? That is our instinct here ahead of the month, quarter-end ‘trade’. We’ve got more specifics on the attached .pdf, but suffice it to say that higher yields and flatter curves are most likely in our opinion. We’d ALSO like to point out something from Barclays that was on our StreetStuff yest and is there once again today (in case you missed it). “Heading for the exit” – is only 12pgs and a great primer given all the Fed-speak today (Kohn @ 12:35pm). Barclays makes the very good point FedFunds might just be irrelevant as paying interest on reserves takes on a more prominent role in CBs toolkit. Have a read – nothing NEW you haven’t seen/heard before but an excellent recap and idea of what to look for in months that lie ahead. OTHERWISE, we found it interesting that folks are keying on IMF h’line – cutting loss estimate to ONLY $3.4 trillion – yet the FT has a different h’line – “IMF warns of further recession risks – Agency says banks revealed only half of losses so far”. Right. Good times. As the market seems to be grinding lower and curves flatter still, we’ll, offer the Daily Pivots here and say they represent to US levels of ‘resistance’ at moment, given higher stocks/weaker bonds dynamic: 2yrs vs 100/1.00, 5s vs 100.03/2.35, 10s vs 102.22+/3.30 and Bonds vs 107.30/4.04. Have a great start to the middle of the week. Best, Saul/Steve/Ani


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