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Week ended 1st July, 2011 – Treasuries & Bonds this week .

After 11 weeks, 2 & 5- year Treasury Yields gave positive weekly closings. Treasuries are indicating sign of pullback when FED is stepping away from the market. Treasury Yields were mostly positive this week. Now what can be the cause of these declined, what I think that the improved news from Greece about the avoidance of defaults and end of QE-2 in US are the main causes of it. As many investors unload these safe assets. But it is good news for Europe about Greece austerity measures in spite of protests and there are some news that many banks from countries other than Greece are working on rollover of Greek debt.


Coming week

0.46 is crucial level for 2-Year Treasury Yields. On the upside unless it breaks 0.55 it is hard for it to rise more from here. In the downside 0.42 and then 0.39 is crucial level.

For 5-Year Treasury Yields, last day I was talking about resistance at 1.70, it even broke that and may be testing levels at 1.90. In the downside 1.60 is next support level but better one is at 1.50 level.
There were some expectation about rise in Treasury value but this week it’s movements were quick. 10-Year Treasury Yield broke crucial resistance level at 3.10 but it is getting some resistance at 3.20 and better resistance is at 3.30. In the downside it’s immediate support is at 3.10.
30-Year Treasury Yield broke good resistance at 4.35 and as I said in last week that unless it breaks 4.50, I don’t expect any big rise from it. In the downside 4.25 is good support for it.

Some are suspecting that Euro-zone debt problems are far from being solved. So if it is true then for them these declined in secured assets are better buying opportunities. There were some talking that Fed will continue to buy Treasuries from the proceeds of maturing debt which it currently owns. That sounds roughly $300 billion debt purchase without adding money into the financial system. So Fed is indicating some hope as they are getting more time for some constructive remedy.

Sorry for brief market reviews this week.


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