If the bounce continues until the end of the month, it is likely to do so in two phases where the first phase is a reaction to weak data and a realization that comments from the Fed on the economy's strength is about the first quarter in particular, with the rest of year expected to benefit from slower growth. That would be why we see more volatility-adjusted strength in shorter maturities today. While the first phase would be about changing growth expectations, the second one would be about changing views on inflation -- markets are more likely to start a move (up or down) with a sudden reaction to growth data instead of price data. This means if oil prices don't go above $66 in the next few days and bonds continue to climb, we'll see markets reajusting their expectations about inflation (expectations that sent bonds 3 ticks down recently) and longer maturities will benefit the most at that point.
Looks like the 2yr rates broke today, while getting a counter rally in the long terms. Waiting for the 90day to follow. In the 30yr, I see three waves down into the recent lows and this being a wave 4 rally that should last a few days or so, wave 5 should take it lower after this rally.
Looks like the 2yr rates broke today, while getting a counter rally in the long terms. Waiting for the 90day to follow. In the 30yr, I see three waves down into the recent lows and this being a wave 4 rally that should last a few days or so, wave 5 should take it lower after this rally.
Long the 10 year from 106215. I think this is a short term bounce. Going to ride it at least one more day. Good luck all Steve
The Beige Book seems to contain less hype about economic growth than the Fed comments since mid-January.
2:00 at http://www.federalreserve.gov/Fomc/BeigeBook/2006/20060315/default.htm 1 minute before my post