[/caption] US Retail Sales jumped more than expected, the third gain in four months. China increased reserve requirements for the second time in a month as loan growth continued to accelerate. After Fannie and Freddie announced that they will be buying delinquent loans, spreads between FN and FG MBS and the 10yr treasury bond are the tightest levels in 17 years. Right now, the futures market is pricing in an 89% chance that the Fed keeps rates somewhere between 0% and .25% through June 23rd, 2010. Currently, the Ten Year yield is at 3.70% (3.72% yesterday) and the 2-10 yield spread is at 284bps, steepening 1bp since yesterday morning. Treasuries rose, snapping a three- day decline, on speculation China's economy will slow and threaten the global recovery after the government ordered banks to set aside more deposits as reserves today. Traders are driving relative yields on Fannie Mae and Freddie Mac mortgage bonds that most influence the interest rates consumers pay to the lowest in 17 years, speculating cash the companies use to buy delinquent loans will be recycled back into the securities. The difference between yields on Fannie Mae's current- coupon 30-year securities, which trade closest to face value, and 10-year Treasuries narrowed to as little as 0.66 percentage point yesterday, matching the lowest since 1992, according to data compiled by Bloomberg. Sales [...] S&P 500 day trading course
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