FPP index is nearing a breakout of its resistance line. IP and GP both up today.
Also re: bonds
US dlr swap spreads widen on flight-to-quality bid
CHICAGO, July 12 (Reuters) - U.S. dollar swap spreads widened on Monday amid a flight-to-quality bid sparked by troubles in emerging markets, traders said.
Weakness in Argentina's and Brazil's stock markets, as well as rumors that China could devalue its yuan, encouraged investors to park funds in the relatively safe haven of U.S. government securities, which pushed swap spreads higher, said a New York-based swaps dealer.
"There was a flight-to-quality trade today," the dealer said. "We saw Argentina bond spreads were wider by several hundred basis points and the Brady bonds that they have were wider by about 80 basis points."
Monday's dealings marked a different type of flight-to-quality than was seen in recent weeks due to concerns over U.S. Federal Reserve manipulation of interest rates, the dealer noted.
"With all these concerns about China, it was basically a reverse of what's been going on, where today was more of a flight to quality in the more traditional kind of sense," he said.
The benchmark 30-year cash T-bond was up 1-1/8 points at 90-28/32, yielding 5.91 percent in late trade.
Swap spreads widened early, first due to the continued tightness in 10-year repo, traders said. |
