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Week ended 17th June, 2011 – Treasury & Bonds this week .

Now this is 10th straight week during which 2-Year & 5-Year Treasury gave negative Yields. It is one of the longest winning streak for Treasury values. In Tuesday after better reports from China and US, Treasury prices made some correction. But Yields couldn’t able to continue with that gains. In the last day, Bonds and Treasuries Yields have not shown much rise in spite of better news about Greek’s rescue, though Treasury price initially fell due to some news about German stands about sharing bail out burden with private investors.

Greece problem was effecting much to the world financial market these days , not only because of Greek protestors but for many reasons. This week S&P downgraded Greek and making it the world’s lowest rated Government debt and Moody’s warned Italy about it’s sovereign rating but 3 French banks were downgraded by Moody’s because of their exposure to Greek debt. Where all these shows that how severe the debt problem is especially in Greece. Though in between these Greek has raised Euro 1.625 billion from sales of 6 months Treasury Bills with higher yields.
In early days of the week Japanese Bond Yields rose on speculation of Bond auction in Wednesday. Later in Thursday, poor auction of 20-Year debt and global concern effected it. But in last day, Bond Yields tumbled because investors were taking shelter in risk-free assets. Some experts are suspecting that Japanese 10-Year Yield could be 1.25% in coming future.
Moody’s upgraded Philippines credit rating, many were expecting this as the progress made by one of the fast growing nation.

Coming week

10-Year Treasury Yield is still moving around 3.00 level with downward bias. It is getting support around 2.90 level. On the upside it is getting immediate resistance at 3.1 level. Unless it breaks 3.30-3.40 level, I do not see any rise on it. But a pull back may happen but I am not sure about it.

2-Year Treasury Yield is getting good support around 0.35 level. If market becomes good ( ? ), it can get resistance around 0.55 level. But before that it has to first cross 0.45 level (Week ended 17th June, 2011 – 2-YearTreasury Yields this week .). Last week’s 1.50 is still acting as good support for 5-Year Treasury Yield. On the upside it can test 1.90 resistance level, but in this moment 1.70 is acting as good resistance. If things become bad it can get support at 1.30 level (Week ended 17th June, 2011 – 5-Year Treasury Yield this week .).

Like others 30-Year Treasury Yield is moving around a support level. 30-Year Treasury Yield is falling less than other Treasury Yields. It’s good support is around 4.10 and then 3.90 level. On the upside unless it breaks 4.50, I do not expect any rise on it. Treasuries have seen much decreases in their yields during few weeks, especially the 2 & 5 Year Yields. This week it looks to me that they are taking some rest may be for another run.
Treasury to sell $58 billion bills and securities in coming week.

Fed chairman warned that credit worthiness of US will be at risk if congress did not vote in favour of lifting the $14.3 trillion debt ceiling.  If there is no deal by August then US may start  defaulting on obligations. Now if I am not wrong, Congress has voted to raise this Debt ceiling for 10 times since 2001. I do not think that this time things are going to decouple !

NOTE :  Please see the disclaimer below this blog.

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