Why Today Was An Important Day For Interest Rates
The markets reversed course
midday on the back of a possible Shiite/civilian uprising in Basra against
Saddam’s military personnel. And as a result, equities finished
higher, while gold and energy futures finished lower. Price action in
Treasuries, on the other hand, was dictated by the outcome of a vote by
the US Senate to slash the proposed Bush tax cut in half.
Equities
Equities pulled back from their highs off the
back of the Senate vote but finished up on the day. The S&P contract
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up 7.20 to finish at 870.20; the Dow
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finish at 8235, and the Nasdaq
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and closed at 1067.00.
Fixed Income
Treasuries closed higher for a second day as
“crowding out” concerns were somewhat alleviated by the reduction of the
proposed tax relief package was cut in half. Bond investors were concerned that
the original $700+ billion tax cut plan would have dramatically pushed up
interest rates. The 10 year contract
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closed at 113-175, up 0-015; the 30 year
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up 0-020 to close at 112-155
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Metals
Gold gave back about half of yesterday’s gains
and was down 1.20, to finish at 328.30
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slight .69% to finish at 4.393. The industrial metals were mixed as copper
was up .25 to finish at 77.10
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.0010 to close at .6550.
Energy
Crude gave back some of yesterday’s gains on the
back of better news for the coalition in Iraq. Oil futures were down 2.41% to
close at 27.97
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5.077
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Currencies
The USD index
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.06 and finished at 101.37.