One of the key driver pushing interest rates lower in the last 48 hours have been 10 year swaps rates in the US moving below 4% outperforming government rates as swaps are spreads down 15bp breaking the former low of 30 back in 2003. The changed TARP on uncertainty in general on Governement involvement in different part of the US fixed income market.
Low in 2008 so far is 3.93
Swap spreads down 15bp in 2 days
Lowest level in the last 8 years is 3.50%
Swap spread breaking to lowest level and probably on the way to flat.
Agencies can not follow swap rates down
On equities with the better tone in the morning we seem to be playing the inverse H&S in S&P and the fact that we have full moon today. Further we have before seen global equity markets rally onn the back of a Intel warning as we got last night. Also expectations for G20 may beging to play in.
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