Bond Market Update: Treasury Market

February 27th, 2009 1:26 pm | by John Jansen |

The Treasury yield curve is undergoing some appreciable steepening today. The 2year/10 year and the 2year/30 has widened by about 7 basis points.

 

There are several reasons for the price action. I have heard of some (small) asset allocation trades out of bonds and into equities.

 

There has been rate lock selling.

 

The street is long the paper which the Treasury regurgitated this week and is playing defense by banging the 10s and 30s. Next Thursday Treasury will announce 3s 10s and 30s for auction the following week. So I guess if you are long and wrong that is the simplest trade.

 

 

 

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  1. 4 Responses to “Bond Market Update: Treasury Market”

  2. By Bman on Feb 27, 2009 | Reply

    Some still hoping for month-end buying via index extesions?

  3. By Fullcarry on Feb 27, 2009 | Reply

    Yup… everybody seems to be waiting for month end buying. Instead the market is already anticipating the coming 10s and 30s.

  4. By Bman on Feb 27, 2009 | Reply

    steeper, steeper, steeper we go – into debt and the curve.

  5. By S on Feb 27, 2009 | Reply

    what excactly is the alternative for bondholders? To hold out and hold their breath. then what. lets end the bondholdrs can’t take a haircut meme already.

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