To: John Pitera who wrote (45 ) 2/9/2000 3:28:00 PM From: John Pitera Read Replies (1) | Respond to
Curve Inversion at New Depths as Only 30 Yr falls in yield, 2 year notes at highest Yield in 5 Years.But the two-year note is down 2/32, lifting its yield to 6.700%, the highest level in going on five years. Still, the mixed performance is causing further inversion of the Treasury yield curve. 50.1 basis points at the end of the day, although it inverted by as much as 55.4 basis point intraday on Thursday. "It's more of the same -- the curve's inverting," said Avram Altaras, Treasury market strategist at Bear Stearns. "Clearly some people may have to buy the long end because there's a short squeeze maybe still. Or else they're worried that there's not going to be enough bonds and so they have to get it." "Institutions with a structural investment need for long-term bonds already enjoy a broader range of alternatives in the agency and corporate market than in the past, and their choices will multiply further if the inversion becomes any more pronounced. Most investors who are willing to accept the interest rate risk of a 30-year bond can cope with the credit risk of an agency bond or a swaps position."
