curve flattening

Discussion in 'Financial Futures' started by dumb_mother, May 5, 2011.

what is the deal with the curve flattening

  1. pimco's position being liquidated by the people that bought it a few tics lower

    3 vote(s)
    30.0%
  2. curve is on it's way to being inverted, a long road but we are on the way

    3 vote(s)
    30.0%
  3. don't fight the fed

    1 vote(s)
    10.0%
  4. i'm making a big deal out of nothing, what a dumb mother

    3 vote(s)
    30.0%
  1. what is the deal with this flattening that's been going on recently, especially between the 10's/30's. normally when we rally that gets stronger but the last week and perhaps more it's been crashing as we rally...
     
  2. What flattening might you be referring to?
     
  3. jsmooth

    jsmooth

    great observation...each morning and market close i'll check the 2/10 spread, and the past few months it has really seemed like 265-277bp is a top/(range) until we see if QE3 comes into play. Its going to be interesting to see how we trade around 260 now...Its also going to be interesting to watch the emerging mkt spreads to see how they move with this suddent drop in commodities...
     
  4. bone

    bone ET Sponsor

    Both the US and European STIR curve are still trading rangebound since December's big move. We would need to take out the March levels.
     
  5. the last week every single day we've rallied the nob has gotten weaker, that is what i'm referring too. normally when we rally the nob strengthens up, but this past week it has gotten weak each and every day while i was trading. the 2/10 obviously flattens in a rally because the tu is pegged right now, but the 10/30 usually strengthens in a rally and it has not been. this screams out shenanigans to me, i'm wondering if it is pimco's position "hot potato" being passed on to the next taker right before unemployment comes out, (which is what i voted on- best way to get ty liquidity is by buying bonds) or if this is the beginning of a big upmove in treasuries and flattening of the curve that the bond is simply getting ahead of (or if i'm making a big deal out of nothing)
     
  6. Here's what I see... Don't see no flattening or nothing like that nowhere.
     
  7. if you trade znzb at a 5x3 ratio as per the ics it has been weak each day this past week. i assumed that would be flattening in the yield as well but apparently not- i never actually look at interest rate %'s with my trading strategies.

    and today we are selling off and it is strong, the bond just seems to be leading moreso than i have seen it lead in general. if we continue to sell of from here for a week or so i think my vote may have been correct for the passing along of pimpco's unloaded positions.
     
  8. well the rally and flattening continues, this along with the sell-off in the commodities market is about as close to a "get the hell out of the market" sign as the market will give until it is too late. i think we'll continue to slide in the markets now until QE3 is announced.
     
    #10     May 17, 2011