Credit markets weakened this morning, pushing rates up. Stocks are mixed and economic news reports are expected to be better. The GDP was reported at 0.6% as expected and Jobless Claims were reported at 366k, which was better than expectations of 371k. Credit markets recovered from their worst level of the day as stocks gave up a good portion of earlier gains. Stocks are also trading lower now with credit markets not responding to the capital shift.
Treasuries showed weak trends earlier in the day, which can be expected from the stronger stock index opening. Weakening Treasury prices, the strengthening dollar, and stocks under selling pressure are indications of the earlier stages of an inflationary environment that could lead to higher rates.