Bonds have been all over the board this morning, as the big news of the day has Traders dazed and confused. Last night, the Senate rejected the $14 Billion rescue plan for the US automakers, citing a lack of wage concessions by the United Auto Workers. However, the White House is now indicating it may be willing to use funds from the Troubled Assets Relief Program to save the auto industry from immediate collapse.
Also this morning, inflation at the wholesale level came in near expectations in November, as the Producer Price Index dropped 2.2% due largely to declining energy prices. Retail Sales for November also fell for a fifth straight month, but were actually slightly better than market expectations.
Currently, Bonds are showing indications of being overbought, which could lead to price losses later today. I recommend floating for now, but be prepared to lock should prices start falling. I will keep you posted.
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