US Treasuries, as illustrated by the 10yr bond, have been range bound for a year as we hem and haw over interest rates and parse through Fed statements.

Image courtesy Evelyn Proimos: http://www.everystockphoto.com/photographer.php?photographer_id=110171

The Federal Reserve U.S. Treasury Department building in Washington D.C.

The range of 2.60-2.80 has been predictable and steady in its fluctuations.  Janet Yellen may in fact be right in what she alluded to in the last week of March: Fed Fund rates could start to rise.  These comments quickly repositioned bond traders to the bearish side, and we tested the top end of this range. 

Every time it appears the macro data and the Fed combine to see a transition to a higher range on the 10yr, we have market events or just plain repositioning which catches people off guard and USTs rally and rates fall.

 

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