"Implied yields on interest-rate futures dropped about 30 basis points last week, Poole noted. A basis point is 0.01 percentage point. ``If a recession were to be starting soon or mid-year, you'd expect to see'' short-term interest rates ``decline by 200, 300 or maybe 400 basis points,'' he said." Bloomberg wtf? by this measure we would never ever had a recession. Can you imagine 2Yr at 50bps? LoL
How many people think that the next direction (3 to 6 months) for bonds is up as TC is predicting? And how many people disagree? If TC is right, is the bond market predicting a recession? jim
NEW YORK (MarketWatch) - A Treasury Department auction of $8 billion in new 10-year notes produced a solid bid-to-cover - or bids rendered to bids received - ratio of 2.64, indicating strong demand. The percentage of indirect bids, a carefully watched category that includes foreign central banks, was 15.4%. The auction produced a high yield of 4.523% and a median yield of 4.498%. Almost time to sell! el surdo
Any comments on 30 year / 10 year activity tomorrow followed by remainder of week? I'm leaning towards long, with a short term target of 113 07. A break below 112 07 negates the above. Here is an interesting blurb from a bloomberg article: "Investors who bet Treasuries would decline this week rose to the highest level since September 2006, according to a weekly poll of clients by J.P. Morgan & Co. So-called short positions increased to 32 percent, from 25 percent the previous week, according to the poll." http://www.bloomberg.com/apps/news?pid=20601009&sid=aYTnKCpWnDPk&refer=bond#
I'll take that trade. This looks like a H&S to me. That aside, I think inflation is the real concern. Out at 113 24, looking for 110 to get out of half. I'm playing this with mid-curve ED puts, however.