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Microcap & Penny Stocks : Rat dog micro-cap picks...
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To: nicewatch who wrote (23404)3/10/2005 3:28:25 PM
From: Bucky Katt  Read Replies (2) of 48462
 
The Fed Saves the Day??

The Fed entered the repo market twice, as is usual for Thursdays, adding a net $6 billion in repos. Conveniently, this was almost the full amount of the $7 billion in net new Treasury bills settling. Repos were executed at rates of 2.53% and 2.54%, indicating some tightness in the cash market. The Treasury’s TIO program had no net activity for the day.

The Fed’s action saved the day Thursday in advance of the 9 year, 11 month bond auction. But what about Friday? By Friday morning, new figures on the budget and trade deficits will be out. Both figures will be monthly records, and should be about $110 to $122 billion and $60 to $61 billion respectively. In addition, to make matters worse, $10 billion in overnight repos are expiring along with $6 billion in TIOs.

The Fed has essentially not monetized [purchased] any additional amount of Treasury bills or bonds in 12 weeks. It does not look likely to start now, with comments from Japan and South Korea about diversifying away from the US dollar. This will continue to pressure the Fed to guide the yield curve higher.

The horoscope for the markets Friday should read “conserve your resources as much as possible.”

wallstreetexaminer.com
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