On June/9 we stated that this major cycle in lower rates had ended. The ten yr Treasury then a 2.99%, down from 3.34, Jan/4/11. In the old days, 35 bps was nothing; it’s a movement nowadays!
Since June/9, the 10 yr moved to a 3.10% (thank you) but then lower to a 2.93%. We did not anticipated the furor linked to Greece, which drove US rates lower (2.93%) based on quality flight. But knowing the business of the future is to be dangerous, we recommended a spread on June/9 as opposed to outright: sell the US 10yr (2.99%) / buy the 10yr Ger bund (3.03%), thus at a -4. That spread is last a +11 today (3.04% / 2.93%), a very satisfactory result, the10 yr Treasury lower in price, bund higher in price.
Robert Craven
Since June/9, the 10 yr moved to a 3.10% (thank you) but then lower to a 2.93%. We did not anticipated the furor linked to Greece, which drove US rates lower (2.93%) based on quality flight. But knowing the business of the future is to be dangerous, we recommended a spread on June/9 as opposed to outright: sell the US 10yr (2.99%) / buy the 10yr Ger bund (3.03%), thus at a -4. That spread is last a +11 today (3.04% / 2.93%), a very satisfactory result, the10 yr Treasury lower in price, bund higher in price.
Robert Craven
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