Bonds Rest on Equity Strength

U.S. bond prices fell moderately today, as U.S. and global equity markets
rallied after days of selling pressure. Bonds typically rise on economic
weakness and fall on strength, so traders took today’s equity strength as a
positive sign for the U.S. Bond prices recently hit yearly highs before falling
on anticipation of a rate cut. Recent weakness from U.S. housing and economic
reports have pushed bond prices back near those highs, on general fears of
economic weakness.

The yen fell today versus the dollar and the euro, as traders reentered the
carry trade on the equity rally. The yen has been trading inversely to global
equities in the past month, as traders borrow and buy yen based on perceived
risk in more profitable assets. The dollar has also been under major pressure
lately from the euro, hitting new record highs yesterday before falling back.
The dollar is also down versus the euro today.

Crude oil futures fell about 0.5% on speculation that tomorrow’s energy
report will show an increase in crude reserves. Oil recently hit record highs
last week, on concerns that U.S. demand is far outpacing supplies. Political
troubles in the Middle East also contributed to soaring prices. With the market
setback that started on Friday, however, crude has been moving lower. Natural
gas futures were also down 1.8%.

Gold futures rose about 0.4% today. Gold rose as the dollar fell versus the
euro. Gold prices normally move inversely to the dollar and with crude oil, and
it was dollar weakness that gold traders focused on for today. Copper futures
are up about 0.4%.

Grains were mixed. Soybeans rose about 0.5%, while corn fell just over 1%.

Stocks rose on Tuesday, extending a rally from Monday lows. Positive
earnings reports from a number of major U.S. companies boosted overall investor
sentiment for stocks. Click

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Stock Market Recap

Economic News

No major news to report for the U.S.