The Flight-to-Quality continues in the bond markets.
Iran said today that the suspension of its uranium enrichment program “will never happen”, fueling speculation that an international stand-off is pending. The United States has sent additional aircraft carriers to the Gulf in response.
Normally, this action is enough to frighten markets into bonds by itself, but a suicide bomber’s attack on a U.S. military base in Afghanistan playing host to Vice President Cheney is adding an extra jolt. 14 people died in the blast.
Mortgage-backed securities (and mortgage rate shoppers) are benefitting from the international uncertainty this morning. But, eith a slew of market-moving data due Wednesday and Thursday, expect rates to return to higher levels as traders take profits toward the end of the day.
Source
Iran won’t halt atomic work, snubs big powers
Edmund Blair
Reuters, February 27, 2007 9:19 a.m.
http://www.reuters.com/article/worldNews/idUSL2722031920070227
Cox and Forkum Editorial Cartoons
February 25, 2007
http://www.coxandforkum.com/archives/001052.html
