Bonds Surge, Dollar Mixed

U.S. 10-year Treasury bond prices rose today, after a choppy down week that ended on Friday. Traders bought the safety of the 10-year bond to escape risky equity markets which are beginning to look shaky again. Global equities fell last week, and have started the week on a low note. Traders are worried that economic problems in the U.S. could derail the equity markets, which has led to bond purchases.

The euro fell versus the dollar and the yen today, after some disappointing inflation data was released across the pond. The euro has been showing major strength across the board against all currencies, but today's report pointed to an underlying economic slowdown. The yen has been trading on the carry trade dynamic for the past months. The yen has been rallying on equity weakness and falling on strength. Today's yen action was choppy, and not a classic carry trade move.

Crude oil futures fell nearly 1% today, on worries that a U.S. economic slowdown will hurt energy demand. After hitting all-time record highs just off $100 a barrel less than a month ago, crude has fallen sharply on mostly negative speculation that a U.S. economic slowdown will have huge consequences for oil demand. Natural gas futures rose about 0.4%.

Gold futures rallied fractionally today. Gold normally trades inversely to the dollar and with crude oil, but today's mixed action led to a gold standstill. Traders normally buy gold on dollar weakness, and also as a hedge against rallying oil prices. Copper futures fell more than 2% today.

Grains were higher. Soybeans were up fractionally, while corn rallied about 0.1%.

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source: tradingmarkets.com