Danny Salas

Archive for January 27th, 2010

Chico, CA Interest Rates Market Report – Economic Influences – January 27, 2010

Auctions, Fed Meetings, Swearing In...Oh My!

Strange Things Are Afoot At The Circle K

Famous line from Bill and Ted’s Excellent Adventure.  What’s so strange?  A lot! First, we have a huge Treasury Auction.  Second, we have the Fed Speaking After their two-day meeting, and finally, we still have no confirmation of Ben Bernanke continuing into his second term as Federal Reserve Chairman.

Treasury Auction

$42 Billion of 5-Year Treasury Notes will be auctioned off today.  Again, if foreign interest is evident, rates should remain stable.  If not, expect higher rates.  There is a twist though.  The Fed releases its Policy Statement after the auction.  So, markets don’t appreciate unknowns, and without knowing if the Fed will change their stance on keeping rates low, “for an extended period,” things could get ugly.

Swearing Ben Bernanke

Relax!  Not as in expletives!  As in he’s not sworn it for a second term.  Now, what if Bernanke’s feeling the pressure of not being sworn in yet, and it blurs his vision regarding the right thing to do, for the economy and the United States?  Just a thought…and, again…markets don’t appreciate unknowns.  What will he comment on regarding the $1.25 Trillion Mortgage-Backed Security Government Purchase Program?  So there’s a lot to be nervous about this morning, and the day will play itself out, interestingly, for certain.

Locking Advice

We’re sitting just below  the 100-Day and 50-Day Moving Averages.  They’re acting as a heavy layer of resistance, that will be difficult to break through, however, we’re also sitting above the 200-Day Moving Average, directly on top of the 40-Day Moving Average.   So, it would be prudent to float into the Fed’s comments and watch the auction results, carefully!  Either way, it’s going to be interesting!

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