Hi Donnie,..Re:.The 30 yr Tyx....is in big trouble.....Its really getting whacked.
Hey Donnie, glad you're back into your trading mode. <g> I wouldn't worry too much about the long bond given the strength of the economy. Long term rates might be where they are supposed to be for a Q4 GDP growth of 5.6%?
Also, if you notice the Jan. to March time frames on the weekly bond charts for the last 3 years, you'll notice that there is annually a sell-off. For one thing, Japan's end of fiscal year is March 31 and they typically repatriate funds at this time. Besides this annual event, we also have heavy corporate supply coming to market due to the low rates.
tfc-charts.w2d.com
Also, as you can see from the same time period, the bond weakness can't be attributed to the dollar.
tfc-charts.w2d.com
Also notice that interest rates are still historically low.
bigcharts.com
Finally, two more interesting metrics are the 30 yr yield over a longer period and an inflation graph as measured by the CPI. Looks like the best of all worlds right now.
stls.frb.org
stls.frb.org
Bond is going to be weak in the face of a very strong economy, seasonal tendencies and supply. More evidence that the economy is doing just fine, thank you, are the higher percentage of companies beating estimates. (At least those that know how to hedge currency risks and take advantage of positive market conditions.) <g>
Hope this all helps. If you need some more convincing, let me know.
Best,
Lee |
