Treasury Market Update

February 28th, 2014 1:00 pm | by John Jansen |

The flattening of the curve is relentless. The 5s 30s spread has moved to 208.2. I opened it this morning at 210.3. Similarly, 10s 30s opened yesterday at 95.8 and this morning at 94.8. It rests currently at 93.4 basis points. I have heard of extension trades in the very short end in which clients have moved from one year paper into three year paper. Real money has nibbled in both the belly and the long end and one dealer even reported some buying of Long Ps. One dealer noted that there is some hope of buying between now and 300PM for month end but he thought the street was set up for the trade or even over set up with a potential for a late day sell off if the buying does not materialize. Separately, traders will turn the truncated attention spans to the labor report next week and I think the consensus there is something around 150K.

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