Limping to the Close : The market took a bit of a hit on the session even as chatter surrounding financial firms continued to be gloomy. Position squaring helped weigh on prices as players look to upcoming auctions as well as the week's key input, Bernanke's testimony Thurs. Trade is already looking out to year-end & gossiping about further fall-out & its assorted far reaching infections ahead. Later in the day the market was all about watching stocks & trading spreads, likely to be the situation Wed although Fed-speak may bounce things around a bit. Measures of volatility calmed some as the day wore on, but generally remain at elevated levels. The curve held near the steepest levels since mid-05 with unwinds flattening things out a touch late, the 2-10-yr yield spread is now 67.1. Trade on the buck all but ground to a halt today after notching fresh lows on the euro, pound, Canadian loonie et al. The yen was even a little bid but gave most of it back by the close. Spot gold flew up to 821.45 (+14.95) with record highs from 1980 around 850 now within striking distance. Crude oil settled at a record 96.70 (+2.72). Tomorrow has Q3 productivity & wholesale inventories along with a bunch of Fed-speak kicking off with Lacker (8:45) followed by Mishkin (9). Consumer credit hits too (15). Treasury sells $13B of 10-yr notes, too.
