Treasuries and Equities Drift Lower

Renewed inflation fears are being blamed for this morning’s weakness in both credit and equity markets. Today’s only data point has already been released by the Mortgage Bankers Association in its weekly report for new Mortgage Applications. For the week ending May 14th, those Applications rose another 1.2% after rising 2.1% the week before. This afternoon, the Treasury will be selling $27B Twenty-Year bonds. The FOMC will also be releasing the minutes from its late-April meeting.

Treasury prices are down slightly with the Long Bond’s yield moving up a couple of basis points to 2.37% while the Ten-Year’s yield is up about the same to 1.66%. The Two-Year is unchanged at 15 basis points. Crude oil is off about a dollar-and-a-half to $64.11 while gold is off about $6 to $1,864. In futures trading, the DJIA is down about 300 points in what may prove to be a volatile day.