US treasury Yield Curve

Discussion in 'Financial Futures' started by ToyotaCamry, Jun 9, 2005.

  1. Does anybody know that the spreads movement (30yr, 10yr, 5yr, 2 yr futures Sep05 on eCBOT) that is taking place these days is for what reason ? Yesterday the spreads were flat and today as well they were almost flat. Any pointers ?

    Thanks in advance
  2. You can private message me as well, thanks a bunch again.
  3. Digs


  4. I don't understand your question? Are you asking why aren't the spreads between the bond, 10yr, 5yr, and 2yr moving?

  5. Okay, my question is that what I am seeing is a perfect parallel shift in yield curve. The whole day yesterday, the 10-5 spread was exactly the same basis points (3bps of something according to your calculations). Today the spreads were almost flat as well.

    Usually I see that the spreads are pretty volatile, but since May 24th or so, the spreads are strictly in a tight range (within half basis point). Do you see the same thing ?
  6. ig0r


    I know quite a few people trading these spreads (FYT, FOB, etc.), I don't watch them myself. It's just like any other instrument, sometimes they will make some major moves, at other times they will hover around the same number for a while - easy money for the savvy trader ;)

  7. Back in the 1970's market commentators often used the expression "recycling petrodollars" to explain price moves. With the current oil prices there are a lot od petrodollars being generated but no one seems to talk about where they are being "recycled". In the 1970's these petrodollars went to the newly independent countries of the developing world under the assumption that sovereign nations did not go bankrupt. This is the source of the debt that the G7 talks about forgiving.

    It has often been said recently that the strength in the US government bond is a result of high savings rates in Asia. One should also consider that petrodollars in search of risk free yield is put a considerable bid under the market. Or maybe look at if from another perspective, if petrodollars are not going into the treasury market then just where are they going?