With the news of forced liquidations, true reports, and missed margin calls the treasury yields and S&P 500 slashed down to 50 week low. Yields of two year were slashed down to around 11.0 bps to 1.50 percent and yields of thirty year were down from 4.0 bps to 4.55. The contract of Eurodollar for the month of June increased up to 13.4 ticks to 97.62. It slashed from 29.32 points to12040.37. Dow Jones Industrial Average closed 214.57points to 12040.37. The NASDAQ crashed down 52.9 points to 2220.47. S&P TSX index of Toronto closed 234.6 points to 13369.22.
Some of the prior jobless assertions, incomplete home sales, and sales of the chain store were included to the different American economic indicators and they were all quite good. Some of the market analysts have reacted to the news that one of the mortgage fund Carlyle Capital Corp have failed four of the margin calls and possess more than twenty billion dollars as liability that has been subjected by Freddie Mac and Fannie Mae of GSE.
The equity and the fixed income cemented the rumors which stated that Fannie and Freddie would be granted straight government obligation debt from the American government. Mr. Richard who is a government bond strategist with BNP Paribas said that the panic was created in the mortgage market.
He also added that it all goes to show that mortgage market is not in a good position and there is not enough liquidity and also the hedge funds. Ivey Purchasing Managers Index is the latest one that is main release in Canada. Earlier in the last month it was anticipated a little weaker at 56.0 mark but landed up to 62.0.
The dollar of Canada slashed down to a quarter cent which is ahead of the figures those were projected by Ivey. Against the USD the dollar of Canada slashed down to 0.20 cents to 1.0136. Canadian fixed income didnâ€™t give much importance to the figures issued by Ivey and the main spotlight was on data related to the Canadaâ€™s payroll. The bonds of the Canadian government also slashed down 11.0 bps to 2.52 percent. Bank of England, Overseas, and Central Bank took a decision for not making any changes in the rate of interest.
The amazing journey for the euro continues and after the verdict of ECB for not making any changes in the rates which was aimed at taking the currency downward. In the press conference Mr. Trichet was repeatedly questioned about the euro the American officials prefer the dollar. Mr. Trichet commented that euro increased of 1.5371 to 0.705 as compared to the American dollar. The euro has increased 932 pips and it is an increase of about ten cents.
At the time of closing of European stock market Eurostoxx was down at 50.76 points to 3088.00, Britainâ€™s FTSE was hundred down to 87.09 points to 5764.40, DAX of Germany down to 90.38 points to 6590.30. As for two years returns of Germany Bunds were up by 4.2 bps to 3.29 percent. For the yields of Britain they were down at 1505 bps to 3.88 percent.