Rate Watch: Carefully Floating

Technically, the 25 day moving average is 66 basis points overhead and Bonds may make a move toward this ceiling. Factors improving Bonds this morning include Wal-Marts announcement that sales could be slowing in August and the release of the Initial Jobless Claims report which came in worse than expected. The only thing preventing Bonds from doing even better this morning is the poor earnings report for Freddie Mac which was also released this morning. For now, I recommend carefully floating and see how the Bond Market reacts to the Treasury auction of $10 Billion in 30 year Bonds this afternoon. I will let you know if there is a change in direction in the market.