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Week ended 15th April, 2011 – Treasuries & Bonds this week

This week most of the Treasuries have increased in their values as their yield reduces lot.

YIELDs
15th-Apr-2011
4/8/2011-4/15/2011
4/1/2011-4/8/2011




2-Year Treasury
0.692
-14.46%
1.63%
5-Year Treasury
2.121
-7.86%
2.58%
10-Year Treasury
3.411
-4.61%
3.80%
30-Year Treasury
4.469
-3.74%
3.54%



Fed bought  $26.9 billion Treasuries this week. Though China is the biggest holder of US Treasuries but in February China is net seller of US Treasuries.
Japanese 10–year yield decreases as there is a concern over more issuance of bonds. Food & Oil prices are causing problem around the world as US inflation was rises to 2.7% in march from 2.1% in February, in China it roses to 5.6% in march, 2.7% in Euro Zone and 8.9% in Indian for March, 2011.

Moody’s  downgraded Ireland’s bond rating, this type of things are spurring the demand for safety. As there is growing uncertainties all round the corner, investors are running for safety. Inflation, negative growth forecast and debt problems are destroying the sentiments. As we can see Gold increase lot this week with Silver. Now comparing with the Gold, 10–year Treasury Note also increases, as we can guess it with the negative movement of it’s yield.



Coming week for Treasuries

If uncertainties like this week stays in coming week then obviously there will be demand for Treasuries. For 2–Year Treasury Notes, if it crosses  0.7 mark convincingly then it may be heading for further lower levels at around 0.6 level. If 5–Year Treasury Note beat the 2.096 level the it may be going for further lower levels at below 2.

 If the surrounding condition is not so worse then I think there is a chance that yield of 5–Year Treasury Note will be going up from here. But in this circumstances this in quite unexpected. Look like 10–Year yield is going to break the 3.35 level. This week 3.60 level acted as good resistance for 10–year yield. It may again try in coming days to test that  level. For 30–year Treasury 4.665 is acting as good resistance. As I was talking about the pattern, it looks to me that it is going to fall further. From the movement of yields it looks to me investors are shifting toward the short-term Treasuries than longer term. I will be looking in 10–Treasuries Note’s  movement in coming week.

Spread between the Greece and  German 10–year bond increases to 10 percentage points, as Greece 10–year yield rises to 13.84%. On the other side spread with Portuguese 10–year bond rises to a record level. These increasing spread are really a cause of concern for all. Some experts are saying that Greece has no other way than go for restructuring its debt. Unless the political matters are solving this type of volatility will be there in the market.




NOTE :  Please see the disclaimer below this blog.

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