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Week ended 13th May, 2011 – Treasury & Bond this week.


There were not much movements of Treasury Yields this week, those were little bit flat  –



Yields
13th-May-2011
5/6/2011- 5/13/2011
4/29/2011- 5/6/2011




2-Year Treasury
0.537
-2.00%
-8.66%
5-Year Treasury
1.835
-1.18%
-5.59%
10-Year Treasury
3.172
0.79%
-4.14%
30-Year Treasury
4.309
0.77%
-2.61%


Due to Greek sovereign debt concern Treasuries gained in Monday but when news about Greek’s aid package came, Treasury prices fell in Tuesday. As there was a concern that interest rate will not increase in recent time.

But in Wednesday’s sell in commodity markets helped to rise the price and in the last day lower inflation figure gave investors an option to push up the Treasury prices as they were getting some indirect assurance that interest rate will not increase in recent time.

In the initial days demand for Japanese bonds were sluggish as government’s $27.31 billion offering of 10-year bond was due in Thursday. But later demand increases as investors were shifting from riskier assets and it was even more in the Friday as weakness came in the equity market but later profit booking curb it’s move.

In Tuesday,  just after Monday’s rating cut by S&P, Greece sold 26 weeks bill yield 4.88% with total value 1.625 billion Euros. Greece’s  2-year notes rose as Euro leaders rejected speculation about its debt default. Spread between 2-year & 10-year German securities narrowed, which indicates that investors are reducing their short-term debt as growth rate is in increasing. Yield spread between Spanish 10-year securities and German bund widened.


Coming week

Treasury Yields were flat this week, 2-Year Treasury is finding some support around 0.54 level. 5-Year Treasury Yield is finding support around 1.85 level. I don’t know why but when I am looking into the Treasury Yield chart I feel that all these are indicating the fall in Yields in near future.
10-Year Treasury yield is finding support at around 3.15 level, unless it is moving out of 3.20 level it will not find any direction. 30-Year Treasury made some movement but it is finding resistance at 4.35 level  and if in coming days it cannot break above that level then it has a chance to go downward.

US sold $72 billion in Notes & Bonds this week and next week it will auction $11billion Treasury.

Markets are waiting for European finance minister’s meeting in coming week which may hints about Greece’s financial package and approval of Portugal’s bail out.
Spain will sell Treasury bill in Tuesday and 5.5% bond of April 2021 on Thursday. Greece is due to sell 3-month Treasury bills in Tuesday.
The Fed began QE2, in November after buying $1.7 trillion in securities through year 2010 to help prevent deflation by increasing the amount of money in circulation. The Fed has been buying about $75 billion of Treasuries a month in a program and that will end in next month. Then, what is next !


 
NOTE :  Please see the disclaimer below this blog.

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