Position Update
May 21st, 2009 2:39 pm | by John Jansen |I just paid $ 92.11 for 1000 IEF. Ten year is trading at about 3.36 percent. This was support last time down. The issue is back over 20 basis points from its best levels of the day. it is extremely cheap on the curve as well as on butterfly versus 5s and 10s.
6 Responses to “Position Update”
By zjin on May 21, 2009 | Reply
This is quick. However, I do not see what make the yield decrease in near future. Unless you expect the equity market will collapse soon and funds will seek safety again.
By John Thomas on May 21, 2009 | Reply
You sir, must have a set made out of iron.
By John Jansen on May 21, 2009 | Reply
stainless steel!!
By Thickrick on May 21, 2009 | Reply
try titanium, new intra-day and closing low here
By ejsmith on May 21, 2009 | Reply
I know little about the bond market but the chart for this doesn’t look too healthy. And who knows if the chart is worth a rip because of the QE announcement? Actually almost seems like IEF has been headed down the entire year except for that one day in March.
By Thickrick on May 22, 2009 | Reply
agree ej the amount of bonds offered in today’s buyback was $45 billion. This smashed the old record set …. yesterday at $38 billion. All of a sudden someone is throwing a TON of bonds at the Fed’s buybacks.
Only those with a trading relationship to the Fed can participate in the buyback …. the 16 or so primary dealers and central banks. Primary dealers are not dramatically increasing their bonds at buybacks. That leaves central banks.
“central banks” does not mean the Bank of Canada or the Swiss National Bank. It means the Chinese. They are offering huge sums of bonds in the Fed’s buybacks and the street know it. That is why bonds are getting destoyed today.
Today’s move in Treasuires is a big deal. It is one of those “no news” huge moves that come at the start of a major trend. Interest rates are going higher, way way higher. The Fed will ratchet up their QE programs to offset but will only accomplish more buying of Chinese holdings. This is not “dumping” Treasuries. This is participating in buybacks.