Bond Question Regarding the 10-year

Discussion in 'Trading' started by BlueStreek, Apr 23, 2009.

  1. The fed is buying in the 7-15 year range on the T-bill curve right, so the result is that the price of the bonds goes up and the yield goes down right, which is why mortgages can be refinanced right now in the high 4`s.

    What is the price to watch in the 10- year which signals that buyers of us T-bills need more yield than the artificially pushed down yield that the fed is trying to manage, and at what price on the low side of yield signals that the fed policy is working as intended, does the fed expect rates to be lower than they currently are with their policy of QE?

    What should I be watching for in the T-bill market that will spill over into equities, that really spooks the equities market into going back down in dramatic fashion?
  2. One of the goals of QE is to make USTs so expensive that people are forced into buying riskier, higher-yielding corps and mtge paper. So, in answer to your first question, you should be watching the corp and mtge spreads.

    In answer to the second question, you should be watching for one thing: failed or uncovered auctions and/or hugely covered QE buybacks. That would potentially indicate a loss of confidence in the govt and the govt IS the financial system, at the moment.

    My 2c...

    My 2c...
  3. I guess that was my 4c, actually :)

    He explained it better this time, i thought so, but wasn`t sure.

    Watch the 10-year if it breaks out above 3.00 % yield with speed, expect the stock market to get nervous.

    Watch the weeks subscription to the Fed `s supply of new issues to finance our debt, do they require higher yields?

    The main disconnect is that large inflationary expectations are being priced into the bond market between the flight for safety at the short end of the curve of treasuries, and the longer out term which jumps quite a bit in terms of yield expectations for 2010 and 2011, which ultimately means higher costs of capital for all borrowing which will put a headwind on any economic recovery potential.
  5. can someone explain the difference in price between these two ten -year treasuries? Thanks

    US10Y 10-Yr T-Note97.9219 -0.5469 2.99590.0655 97.9219 2.9304 05:06:16

    10-Year 2.750 02/15/2019 97-31 / 2.99 -0-19 / .071 04/24

    The quotes from cnbc & Bloomberg are quoted in the 97 area whereas the barchart quotes the 10-year in terms of the 122 range
    10 Year T-Note (ZNM9) Jun 09 121-175 -0-170 122-025 122-055 121-130 04/24/09 Q C O

    what is the difference? isn`t there only 1 10 year treasury price?