As such many investors bought lot of Treasuries . But later days of the week that fear reduces .
Treasury gains were not much this week due to advancement of stocks on better than expected corporate earnings . 10–Year Yields decreases on the speculation that if Government decides the budget cuts then it can slow the economy . The difference between the yields of 2-year and 30-year is quite lot . Investors are buying short-term treasuries than longer term . On the other hand this week gold is probably has similar movement with 10–Year Treasury .
Japanese government has announced a $48.9 bn. Emergency budget as relief package for natural disaster . Government said that they will neither issue bonds nor borrow money from the markets for this fund . It will be very interesting to see how they fund this amount . It is necessary here to say that
has a debt burden of twice the size of the economy . This week there were not much change in the yields of Japanese bonds . Japan
German Bunds are getting advantage in this moment due to Standard & Poor’s negative outlook on
, many experts are thinking it an alternative to U.S. Treasuries . It’s 10-year Bunds yield was down to 3.27% which shows lot of thing . In coming week it is going to auction 6 billion Euros of 10-year debt . U.S.
Coming week for Treasuries & Bonds
For 10-year Treasury yield , 3.30 is a good support , now if it breaks that convincingly then it may go close to 3 or even more in the downside . 30-year Treasury is finding support around 4.45 area , if it breaks it then it may be heading for the pattern which I was talking in last day . Last day 30-year Treasury yield was decoupling with other Treasury yield , it is quite interesting that how it decouples from others . May be investors are not buying much of this long-term Treasury .
Next week $155 bn treasuries are due for sell . U.S’s borrowing limit will end in May 16 ,2011 , later only Emergency measures can provide borrowing room . So what is next !
But aren’t these rating agencies are those who gave superior ratings to those failed banks ( Lehman , Bear Stearns e.t.c. ) during sub-prime crisis , around 2008 ! So this time there are two conclusions –
1) Ignore these outlooks or rating downgrades .
2) Or , they may be smelling something before and this time they don’t want to repeat their mistake .
Choose one .