Bonds Surge, Dollar Mixed

U.S. 10-year Treasury bond prices rose today, after a choppy down week that
ended on Friday. Traders bought the safety of the 10-year bond to escape risky
equity markets which are beginning to look shaky again. Global equities fell
last week, and have started the week on a low note. Traders are worried that
economic problems in the U.S. could derail the equity markets, which has led to
bond purchases.

The euro fell versus the dollar and the yen today, after some disappointing
inflation data was released across the pond. The euro has been showing major
strength across the board against all currencies, but today’s report pointed to
an underlying economic slowdown. The yen has been trading on the carry trade
dynamic for the past months. The yen has been rallying on equity weakness and
falling on strength. Today’s yen action was choppy, and not a classic carry
trade move.

Crude oil futures fell nearly 1% today, on worries that a U.S. economic
slowdown will hurt energy demand. After hitting all-time record highs just off
$100 a barrel less than a month ago, crude has fallen sharply on mostly negative
speculation that a U.S. economic slowdown will have huge consequences for oil
demand. Natural gas futures rose about 0.4%.

Gold futures rallied fractionally today. Gold normally trades inversely to
the dollar and with crude oil, but today’s mixed action led to a gold
standstill. Traders normally buy gold on dollar weakness, and also as a hedge
against rallying oil prices. Copper futures fell more than 2% today.

Grains were higher. Soybeans were up fractionally, while corn rallied about
0.1%.

Stocks plunged on Monday, despite a flurry of deals, as credit worries
continue to rattle the markets. The Dow and S&P 500 lost more than 1%, while the
Nasdaq lost more than 2%. Click

here
to read the rest of today’s

Stock Market Recap
.


Economic News

No major economic news to report for the
U.S. today.