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Week ended 10th June, 2011 – Treasury & Bonds this week .


Now this is 9th straight week during which 2-Year & 5-Year Treasury gave negative Yields. It is one of the longest winning streak for Treasury value.


In Tuesday ECB president told about backing of rollover of Greek bond and he also told about buying new Greek bond. But some strong statement came from German finance minister, who said that bond holder to share further Greek aid. Greek, Irish and Spanish bonds slumped due to this remark. The Yield difference between 10-year German bond and Greek bond was at 1.35 level in Friday and for Portuguese 10-Year bonds the spread rose to 743 basis points. The cost of insuring Greek and Portuguese debt rose to all time highs. Irish 10-year Bond Yield jumped to as high as 11.35%, which is a Euro-era high. Spain is little different from other PIGS members but not much as its 10-Year Bond Yield roses to 5.48% and it was as high as 5.52%.
Japanese government bond Yields rose in the early of the week, analyst said political confusion is the reason of that. Later part of the week Japanese bonds were steady.



Coming week


10-Year Treasury is moving around 3.00 level and it looks to me that it is waiting for some trigger for any directional movement from here. This week it was trying to test its last week low, but as I said in last week that if things become worse then it can plunge more may be testing its lower support level of 2.80. But this week 10-Year Treasury Yield was little steady. I do not see any rising trend in coming days may be some bounces but not much. Unless some better economic news are coming, it will be very hard for Treasury Yields to go up.

2-Year Treasury got support just before 0.35 level , this level is very strong for it and in coming days it will test this level more (Week ended 10th June, 2011 – 2 -Year Treasury Yields this week .). Though I said last week that 5-Year Treasury can reach up to 1.30 level, but it did better this week as such it find support around 1.50 level (Week ended 10th June, 2011 – 5-Year Treasury Yields this week . ). 2-Year and 5-Year Treasury Yields are showing more panic than others, as I said that it is dropping quite a while now. 30-Year Treasury is still moving around 4.10-4.30 level better to say it is right now in 4.20 level, though it fell less than others during  last few week.
US Treasury plans to sell $51 billion of short-term bills in Monday.
Greece to sell Euro 1.25 billion 26-week Treasury bill in 14th June.
Spanish government is planning to issue debt due in 2026 in June 16.

As I said in my previous postings that Treasury Yield were forming bearish pattern and now those patterns have already worked out quite well during last few weeks. But there are still options to drop more from these levels. So in coming days if economic scenarios do not show any change then I do not expect any different movement from these Treasury Yields and also from those European bond yields. Sometime it looks to me that problems of PIGs countries are close to solve but suddenly some bad news comes and things go far from solution. Let see in coming days how leaders  & authorities come into solution about Greece and also about US.




NOTE :  Please see the disclaimer below this blog.

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