MBS UPDATE: POST SPEECH REACTIONS

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Here is the text of Treasury Secretary Geithner's Speech....CLICK ON ME TO READ

MARKET REACTION: WE NEED MORE DETAILS!!!!!

MBS stack is status quo, TSYs continue to outperform...beware of profit takers but for now not much change in MBS world

FN30_________________________                GN30______________________

FN 4.5 -------->>>> +0-03 to 101-03                        GN 4.5 -------->>>> +0-05 to  101-11

FN 5.0 -------->>>> +0-08  to  102-06                      GN 5.0 -------->>>> +0-07 to  102-13

FN 5.5 -------->>>> +0-04 to  102-18                       GN 5.5 -------->>>> +0-03 to  102-23

FN 6.0 -------->>>> +0-01  to  103-08                      GN 6.0 -------->>>> +0-02  to  103-06

For stocks it was a classic buy on rumor sell on news....financial stocks hated the lack of details. The lack of specifics breeds uncertainty which has pushed a protectionist bid into bonds (flight to safety)

Bond yields down...stocks getting worked

3 yre note auction will set the tone for rest of refundings this week...FTQ should be helpful

Thought: I wonder if the US Government is manipulating long term yields again???? Thin speech = Flight to Safety= Lower Borrowing Costs????

 

Poll: Was Financial Stability Plan: Phase 1 Enough???

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