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  • 4 Issues You Should Know About This Week

    With the bond market closing for Veteran’s Day tomorrow, here’s a look back at what has been happening this week and their effects.

    1. Italy is the new Greece when it comes to Europe’s economic problems. However, after a few uncertain moves, it seems Italy is stepping up their game to solve their issues. Berlusconi seems to be actually stepping down, and the country is establishing a new government around Mario Monti, a former European Union Competition Commissioner. In addition, Italy has pushed up their austerity vote to tomorrow, when originally it was planned to be taking place in December.

    2. Greece has announced Lucas Papademos as their new Prime Minister, who worked with Greece’s Central Bank for eight years, helping the country achieve strong economic growth rates at the time. His first assignment is to adopt their rescue plan so Greece can start to receive financial aid in the next couple weeks. However, despite this encouraging news, US investors continue to seem uncertain and still investing in the security of US Dollar and US Bonds.

    3. The monthly bond rollover came in this morning with an effect being -25bp for a 3.5% coupon. As a result, there are no effects on rate sheets or pricing.

    4. Lastly, the US Weekly Jobless Claims were released, revealing a decrease to 390,000, which is better than expected. Although this number is still not great, it shows that we’re heading in the right direction.

    All in all, US Markets still are being controlled mainly by the news happening in Europe. Currently, stocks are rising and interest rates are falling, but as is evidence from this rocky week, any change in news coming from across the Atlantic could make rates volatile – fast.

    Nov 10 2011