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Weekly Treasury & Bond market review after 9th September, 2011.



Republican must face some difficulties by Obama’s speech in joint session of congress. It looks to me that Obama is transferring the ball in republican’s court. Who knows, may be campaign has already started for coming US election !  Whatever it was, practically markets were disappointed with Obama’s speech as they were expecting something.

Yields
9th-Sep, 2011
9/2/2011-9/9/2011
8/26/2011-9/2/2011




2-Year Treasury
0.169
-12.43%
-3.50%
5-Year Treasury
0.804
-6.62%
-13.46%
10-Year Treasury
1.981
-0.15%
-9.90%
30-Year Treasury
3.245
-1.60%
-7.17%


Things became more problematic for Greece after Angela Merkel party faced a big loss in local election as German authorities told some strong words about Greece's obligation under bail-out agreement. Actually market was not impressed about last week’s talk suspension, as Greek Bond Yields and CDs rose higher areas, but German court’s decision, supporting the bail-out changed the whole game. But in the last day two news created panic in the markets, one was resignation of a German official from the executive board of ECB and other was news that Germany is preparing for events in case of Greece defaults.   


Fitch’s warning to China and Japan about their debt loan may be a new concern for these countries, as banks are struggling for their massive debt.


Coming  week

This week US Treasury Yields were mostly flat but things changed in the last day, as that rumor of Greek default made investors to take shelter in these secured assets. So in the last day Treasury Yields decreased lot. I don’t think markets of safe assets are going to perform differently in coming week, though some dramatic events in Europe may change it. But in this moment environment is not suitable for dramatic events in Europe.
Except 30-Year Treasury Yield, others are in their 10-year lowest figures. In the last day most of them broke their recent support level. So if things continue then in coming week we may see yields are dropping in more lower figures.

Treasury is going to sell $122 billion bonds and notes in coming week.

Sometime I think, what is the contribution of Greece in financial world comparing to the other big problematic countries !  It is true that EURO will suffer if that type of rumor really occurs. But I think bigger problems are there in other part of the Atlantic.
Markets were disappointed by Bernanke’s comments, as expectations were high from him. Many are thinking that policy makers are not doing enough for struggling housing market and for creation of jobs. Obama is talking about many things like tax cuts, new spending for boosting hiring.  But unless investors are getting results, anything don’t matter to them.


NOTE :  Please see the disclaimer of this blog .



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