“What you have to look at is what has been occurring in the foreign exchange markets. They (Bank of Japan) were rumored to be significant buyers on Friday and Monday, the (Treasury) market was bid up on Friday and Monday, so there's a very big risk that they've already put that money to work.”
“It's a fairly robust auction. The 46-odd percent is significantly more robust than average participation rate for last three three-year note auctions. Clearly, this continues to indicate there is fairly good overseas investor participation.”
“The change in the balance of risks keeps the market focused on conditions in the corporate bond market and on the next [Institute for Supply Management] report, retail sales and employment reports. We think if there's any severe weakness in any of those reports, the Fed will lower interest rates at the Sept. 24 meeting.”
“We think the Fed is trying to manage market expectations on the pace of economic recovery and on when the Fed is likely to shift its (monetary policy) bias to neutral.”
