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Week ended 27th May, 2011 – Treasury & Bond this week .


Treasuries gained for 2nd  in a row, as no improvement in European debt crisis and no better economical figures. Some profit booking came in Treasury, on Friday. On weekly basis 2-Year & 5-Year Treasury yields close negatively for the 7th consecutive week.



Except German bund most of the other European bonds especially Spain and Greek's, were in pressure in the beginning of the week. Spanish 10-Year yield jumps in early days as Spain’s ruling party defeated in the local regional election. But this problem did not effect much in selling of Spain’s short term Treasury sale in Tuesday.
 
German 10-Year yield fell below 3% for the first time since January due to European debt problem. Benchmark bund yields is set to declined for  7th consecutive week. German 2-Year note rose as report showed that inflation eased this month so the case of higher interest rate may be far away.
Japanese bond maintained gain in spite of Friday’s consumer price data. Investors were little shaky about taking bets on Japanese Government bond because in one hand there is problem in Europe which is creating panic between investors to look for safe heaven, on the other side Japan is in recession. So investors are in doubtful, whether they will buy Japanese bond or not.


Coming week

During last few weeks I repeatedly told that most of the Treasury Yield figures are in bearish pattern and they are going to fall, now those patterns are working quite well.

2-Year Treasury yield fell for the 7th week. After breaking its 0.55 support it will be looking for some support at 0.45, its good support is at 0.35 area (Week ended 27th May, 2011 – 2-Year Treasury Yield this week .).  For 5-Year Treasury yield 1.70, is providing some support and if it drops from here then it can come to test 1.50 level (Week ended 27th May, 2011 – 5-Year Treasury Yield this week . ). 10-Year Treasury yield is looking for support at near 3.00 level but I was expecting some more fall from it. First I want to see it’s support at 2.90.

Last day I was talking about 4.20 support level for 30-Year Treasury and it is still getting some support there,  if further falls happen then 3.90 is good support for it. In the upside 4.3 is acting as good resistance for it.

Next week Treasury will sell $75 billion in short-term security.
Euro zone bailout fund plans to issue 10 billion Euro bond in June to finance the rescue of Portugal.

Though some hints are coming but still it is unsure that whether interest rate is going to increase in EU area. Next week European  matter and US economical issues are going to rule the debt market.



NOTE :  Please see the disclaimer below this blog.

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