Bond Auction
June 11th, 2009 12:56 pm | by John Jansen |There has been some chunky buying and some chunky as well as lots of volatility. The Bond is back to 4.74 after trading 4.83 this morning.
The conventional wisdom is that the market has found equilibrium around 4 percent 10 year and 4.80 ish bonds.
Mortgages were the canary in the coal mine on the sell off and the low coupon version trades well today. Some argue that the convexity selling is over.
Others are taking the tack that the FOMC will talk about removal of some of the emergency measures and in so doing will burnish its bond vigilante credentials and the holders of bonds will be happy holders.
I will watch it trade. There has not been a reward to buying early the last several months and with the concession gone it doesnt make sense to play. The market has been very volatile and I will wait for a back up.
