Treasury Market Update

April 22nd, 2009 11:00 am | by John Jansen |

Treasury bonds are taking a severe drubbing and the yield on the benchmark 10 year note is approximately at the level which prevailed on the day when the Federal Reserve announced quantitative ease (2.96 percent currently).

One participant noted that the 200 day moving average on the Long Bond was 3.798 percent and the market penetrated that level this morning as a sharp knife would melting butter.

The yield curve has steepened sharply and participants are deeming the belly of the curve particularly odious. The 2year/10 year is once again close to 200 basis points and the 2year/5year/30 year butterfly has returned to 93 basis points after a foray into the low 100s.

Dealers report rate lock selling and fear of very heavy Treasury supply next week. As I have mentioned too often the Treasury will announce around $ 100 billion of new supply tomorrow. It will consist of 2year,5 year and 7 year notes.

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  1. 5 Responses to “Treasury Market Update”

  2. By Bman on Apr 22, 2009 | Reply

    “GM Won’t Make June 1 Payment of $1 Billion on Debt, CFO Says (story developing).” Is this a big deal?

  3. By Stuart on Apr 22, 2009 | Reply

    Um, GMs bankruptcy will be and that’s what this screams. I read elsewhere 1.1T in CDS hanging out there. We’ll have to see how those offset and who’s left holding that bag.

  4. By Bman on Apr 22, 2009 | Reply

    Let’s just pray that in the next few months we don’t see a similar headline with “Treasury” taking the place of “GM”.

  5. By coolmama on Apr 22, 2009 | Reply

    Let’s just pray that in the next few months we don’t see a similar headline with “Treasury” taking the place of “GM”.

    Why hasn’t anybody shouted tinfoil?
    Too busy praying?

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