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Treasury & Bond market review (weekly), after 27th January, 2012.


Market is still looking for some solution from Greek debt talk; there is still confusion about the private role or better to say their sacrifices!  Somewhere I read that Greek finance minister told about wrapping up debt swap talks by 1st February, I think it will be better if something comes ahead of European Union summit. Euro area Bond yield are not showing any worse signal for this moment, which is quite better. In fact bond yields of Italy and Spain are showing something good, but things are not same for Portugal. I have a feeling that Portugal may be the next headline after Greece debt talk.

US Treasury yields are again changing there trend in each week. Bernanke’s remark about Bond buying helped US Treasury yield to drop more, especially the 5 year US Treasury yield which is making lowest figures.

YIELDs (US)
27th Jan, 2012
1/20/2011-1/27/2012 (%)
1/13/2011-1/20/2012 (%)




2-Year Treasury
0.215
-11.16
7.56
5-Year Treasury
0.749
-15.65
12.26
10-Year Treasury
1.893
-6.56
8.46
30-Year Treasury
3.06
-1.35
6.49

This week the moves of long-term US Treasuries yields were much in the early days but comparing to that shorter versions were different.



Treasury & Bond market forecast for coming week.

In the last day most of the US Treasury yields have shown reaction of that gdp figure. These yields are falling for long, though in recent months they are trying to settle a bit. As I said in past that they are changing their direction in each week, so considering that it is expected that yields will increase in coming week. But if nothing comes out from geek debt talk then things may be different, now there are also too many ingredients from US. On the other hand Euro area Bond yields may show reaction of Fitch rating cut, but good things from Greece debt talk can shadow that.

2-Year US treasury Yield is still trading in 0.22 to 0.26 ranges, unless it is coming out of these range it is tough to say anything about it. It makes lot of short-term patterns but it is not reacting on it. In the downside it has also a good support at 0.20, if it breaks that then it can drop more. If it able to break 0.26 then it can touch 0.30 levels.

5-Year US Treasury Yield is looking for support around 0.75 levels; it was unable to test 0.95 level in the upside. If it breaks this 0.75 level then it can make new lows. Somehow if it reverses then it will get immediate resistance at 0.85.
10-Year US Treasury Yield was unable to break 2.10 level, it is again trying to follow its past trend. It has a good support at 1.75-1.80 levels. If things reverse then it can test level above 2.
I still cannot say that 30-Year US Treasury Yield is out of the bearish trend which I talked during last few months, may be it is just a change of levels. Any way 3.10 was a good level for it, I think it is dropping less than others. In the downside as I said in last week that 2.80 is good support for it, but before that it has to break 3.00 level. If things changes then it has a chance to test 3.40 level.

Some conclusion need to be drawn on Greek debt restructuring, because bond investors in Italy and Spain are looking it very closely. I think Greece’s next installment which depend upon this debt talk, is very crucial for overall financial market of the world, otherwise perhaps we know what can be!


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