Market Commentary 11/10/17

Bonds ended the week on a sour note as yields rose in response to improved economic growth from Europe. They were also impacted by comments out of the European Central Bank (ECB) that a firm deadline on European bond purchases is needed. Government bond purchases have been an elixir for the marketplace and have been instrumental in pushing down global bond yields. A move away from this policy will result in higher interest rates.

The only economic report due for release today is Consumer Sentiment. While the reading came in lower than expected, the reading remains high and supports the the belief that people are upbeat about the economy.

With the 10-year Treasury touching 2.400%, we remain biased toward locking in interest rates. We are also closely monitoring the flattening of the yield curve (the relationship between short term and long term yields). The inverting of the yield curve has been a historical predictor of a slowing economy and is a margin squeeze for banks and lenders.