Market Comment

Mortgage Bonds opened near unchanged thanks to the Eurodrama resurfacing front and center∑and then moved higher on a disappointing Initial Jobless Claims number.

The final reading of 4th Quarter Gross Domestic Product remained at 3.0%, a decent number. However, for 2011 overall, GDP was an anemic 1.625%, well below the number needed for a normal functioning economy.

This afternoon the Treasury will auction $29B in 7-Year Notes. Yesterday's 5-Year Note auction was ugly, with tepid buying demand. If today's 7-year Note auction disappoints, Mortgage Bonds could quickly erase this morning's gains much like they did yesterday.

Leonard WinslowDirect: 434-760-2580

943 Glenwood Station Lane, Suite 200

Charlottesville, Va. 22901
mailto:leonard.winslow@newamerican.com
web: www.newamerican.com/leonard.winslow

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