Top Takes From RealMoney

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1. Treasury Market Slightly Lower
By Tom Graff
8:20 a.m. EDT

Treasuries are slightly lower ahead of the consumer price index report today. On the basis of the very strong equity market and poor technicals, I'd guess that unless CPI is a big miss to the downside, Treasuries will sell off today.

We are basically at a significant resistance level at 3.50%. The next level is a pretty soft resistance at 3.67%. I really don't see any hard resistance until the 3.90s. So it could get ugly. I'm currently at my lowest Treasury allocation all year.

Meanwhile, it looks like CIT (CIT Quote) will get some sort of regulatory forbearance, allowing funds to flow to their Utah Bank. An exchange with bondholders looks extremely likely to me, and that is probably the easiest way for CIT to free up regulatory capital. With bonds recently trading in the $70 area, if they can be retired for $80, that could raise substantial capital. I'd guess that a large percentage of current CIT bondholders are recent purchasers who never envisioned par anyway.

No positions.