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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures
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To: Jerry Olson who wrote (6010)10/9/1998 11:18:00 AM
From: B.REVERE  Read Replies (1) of 44573
 
Jerry, you've misread the post. Long rates on bonds are rising
(from 4.7 to 5.17) in less than a week. They're rising because
hedge funds with exposure to a strong yen are getting killed by the dollar's weakness. The expectation of another cut is causing the dollar to fall further. If the fed actually dropped rates again,
hedge funds would be forced to liquidate more bonds to cover their
losses on the yen. While this is all happening, those investors seeking safe haven from the coming recession here are looking to park
their money in bonds >5% which they consider a good yield considering
rates are predicted to drop another 100-150 basis points within a year.
These guys are selling equities to buy these above 5% bonds. These
guys are the ones with the multi-billion portfilios.

Good trading,

BR
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