Skip to main content

Week ended 8th April, 2011 – Treasuries & Bonds this week

In the early period of the week investors were demanding higher yields for holding 10-year Portuguese bonds over the German bund , because uncertainty increases as look like Moody’s  was making primary grounds for Portugal to go for bail-out . In Wednesday Portuguese prime minister said that he would ask for financial support from EU and  Mr. Trichet  confirmed that they will encourage Portuguese authority to ask for support . This type of situation reflects that Portugal is just one step away from bail-out fund .
Portugal has raised about 1billion Euros but they have to pay almost 2-3% more interest than what they have to pay if they raised it 1 month ago . This interest rate is too much for an economy which is not doing well but Government has no other way because a loan is due this month of about 4.2 billion Euros and another 4.9 billion in June .
Some good news for Spain as IMF sees not rescue help is needed for Spain . I think their decreasing bond yields show the reason .
On the other hand due to increase in interest rate  in EURO area and other causes Treasury yields are effected .


YIELDs
8th-Apr-2011
4/1/2011-4/8/2011
25th-Mar-1st-Apr-2011




2-Year Treasury
0.809
1.63%
7.85%
5-Year Treasury
2.302
2.58%
4.12%
10-Year Treasury
3.576
3.80%
0.29%
30-Year Treasury
4.643
3.54%
-0.31%



Long term treasury yields have increase much . 0.84 is acting as a resistance for 2-year treasury yields. Unless it crosses 0.85 it is hard to say any up further up move . For 5-year 2.32 is a resistance and unless it crosses 2.40 it is hard for any up move .

There were some resistance at around 3.50  for 10-year treasury note and it broke  it now it time to see if it crosses 3.75 convincingly .  Around 4.65 ,  30-year Treasury is facing resistance and it may come down from here but things will be different if it crosses 4.75 level .

In the initial day investor & trader in Treasury market were little bit confuse , because of confusion about economic stimulus and interest rate increase .  Next week Treasury is going to sell bond , notes , and bills worth $128 billion .
Japanese bond of around 7-year , was relatively cheap in comparing to other maturities , which attracts some foreign hedge funds . Japanese yield is heading higher due to speculation of issuance of new bond as investors are guessing from the comment of prime minister .
German bund fell for 3 weeks in a row , as it’s  10–year yield increases with other problematic countries like Greece and Portugal .
10-Year Portuguese bond yields rose 518 basis points over German bunds . Let compare others with German bunds , Greece is 938 basis point , Spain’s spread decrease to 178 basis point and Ireland’s spread reaches to 577 points .
So may be Portugal is in trouble now , but Greece is worse . They may need more help from rescue fund .




NOTE :  Please see the disclaimer below this blog .




Popular posts from this blog

DAX forecast for coming week ended 15th March, 2013.

This week was very good for Dax, though it is getting resistance at 8100 range. Now it has a chance to test downside again. I think even if Dax tests lower levels, it has more chance to bounce back from around 7800 range and therefore it will again test upside.

On the other hand if it shows flat movements around 8000 range in initial days of the coming week then there is a chance that it may take a decisive call in later days. Considering the recent trends it has the chance to test higher levels may be around 8200 but that will be a very aggressive call after taking in to account the movement from last December. I will worry about the downside when Dax will be testing levels below 7600 ranges.
NOTE: Please see the disclaimer of this blog.

Fed’s rate hike Vs Sovereign rating up gradation

Financial market is very much worried about the rate hike in US, probably this is going to come in coming December. But I think that is not going to change much of the things. Even Fed hikes rate in December it will be not so much, because we are forgetting one thing that interest rate in US is around zero so even they hike rate by 0.25-50% basis points (at most) in this year that will not be enough cause for Dollars to change their locations around the world especially markets have already discounted this coming rate hike in US.

A new disaster is coming in EU banking sector, whom to blame, big Audit firms!

First I was thinking what should be the title of this posting? Will it be good if I write that big audit firms set the time for EU bank collapse! If someone is thinking that financial crisis is over then think twice because the coming EU banking crisis is no way less than 2008 financial crisis. The time bomb will explode at some point of time in future, the time has not yet set for it. In that tsunami, forget about the smaller if any major banks collapse then I will not be surprise.