Markets

The Nemenoff Report Bonds Lower, S&P's higher, Silver Higher

Financials: June Bonds are currently 1'04 higher at 143'00 and the 10 Yr. Note 14 higher at 131'11. The imposition of a levy on Cypriot bank deposits has sent the market once again in "risk off" mode as participants headed for safety in U.S. Treasuries. The implications of these actions are still not clear. The ECB, EU and IMF have demanded that Cyprus come up with in excess of 5 Billion Euro's in order to be bailed out for an additional estimated 12 Billion Euro's. The market worry is how will this effect other bail outs and deposits in Spain, Greece, Italy and Portugal. The case in Cyprus is a bit different as it is considered a haven for deposits from individuals from other countries and deposits have swelled well beyond Cypriot GDP and banks have had to to invest money in countries other than Cyprus. It is rumored that Cypriot banks have a wrong way bet on Greece and are now in need of recapitalization of up to 80% in some circumstances. For the moment Bonds have broken through resistance of 142'26 (overnight high of 143'24). For the near term treat as a trading affair between 142'11 and 143'28. If the market should trade above the 144'00 level my bias will return to negative from my current neutral bias.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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