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Treasury & Bond market review (weekly), after 9th March, 2012.

I don’t know whether it was the best offer but as someone said that it is the only existing offer. So the question of using force is not valid for those private Bondholders of Greece.
Italy’s 10-year Bond headed for 9th weekly gain, where Spanish Bond rose but US Treasuries fell for 3rd days.

9th March, 2012
3/02/2011-3/09/2012 (%)
2/24/2011-3/02/2012 (%)

2-Year Treasury
5-Year Treasury
10-Year Treasury
30-Year Treasury

Like German Bunds, in the early days US Treasuries advanced due to Greece debt concern and bad economic reports but later it reversed, especially after better payroll data. Though things were not great in the later period of the last day, there was also a concern about widening trade deficit.

Treasury & Bond market forecast for coming week.

Markets have not finished in a great way in the last day, so it will not be totally sound to think that investments will shift toward risky assets. What I think that in coming week we may see flat movements for Bonds.

2-Year US Treasury Yield is again trying to break 0.30 level, which it failed to break in the last 6 months. As I said in my earlier reviews that it will face very hard times in crossing 0.45 level from here, but first it has to cross next levels of 0.35-0.38. If things reverse then it will get initial support at 0.27-0.28, if it breaks that then it will get support at 0.23-0.24.
5-Year US Treasury Yield is forming a pattern which says that it may test higher levels in coming days; it may trigger that pattern if it breaks 0.91 in the upside. Therefore it has to come-out from its long-term pattern of lower highs and lower lows, which is not easy for now. In the downside if it breaks 0.80 then it will test 0.70 level.
As I was expecting that if 10-Year US Treasury Yield failed to break 1.93 support level then most chance is that it will again test higher levels. But still it is moving around 1.80–2.10 range, somewhere I was seeing that in spite of Greece deal, US Treasury is going to see huge inflows in coming days. So considering that I think that 10-year US Treasury yield will stay in this zone for long. But somehow if it breaks 1.93 range then it will drop into more lower levels.
30-Year US Treasury Yield makes a pattern which can take it up to around 3.25 level. As I said in my last week’s review that 3.40 looks far for now, so I will wait for it up to next week. In the downside if it breaks 3.05 then it will test 2.90.

This episode of Greece drama has not provided any permanent solution but it is the need of the hour. Now focus may shift toward Portugal!  Payroll report in US was a big thing, but it seems to me that market it not very pleased with other things.

NOTE :  Please see the disclaimer of this blog.


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