To: wmwmw who wrote (3248 ) 2/13/2001 1:11:08 PM From: John Pitera Read Replies (2) | Respond to It looks to me like the yield curve steepened yesterday, I know that the spread of the 10 year note and theI heard an argument that if bond yields curve flat, then rate cut has little effect. Treasury Summary: Not a very exciting day in the market, though not particularly surprising when considering that most accounts were sitting on their hands, waiting for tomorrow's testimony from Fed Chairman Greenspan, as well as retail sales data for January. Treasuries traded higher in early morning activity on the back of last week's favorable technical closes, while talk of convexity related buying in the belly was particularly supportive. Gains failed to hold however, as the Dow climbed steadily higher throughout the session, even helping to drag the Nasdaq out of the red for a little while. The long end saw the better selling, pressured by supply concerns stemming from the launch of a $1 bln 30-year Freddie Mac reopening. Supply concerns also weighed on the market as a whole on the back of talk of both a mortgage and corporate bid list making the rounds. Triple digit gains in the Dow took the market to fresh session lows just ahead of the close, while concerns surrounding a stronger than expected retail sales report also seemed to weigh (we are on the high end of expectations, looking for a 1.0% increase). That said however, the March T-bond did manage to find some much-needed support around 104-11, right where the contract closed for three consecutive sessions last week. The March T-bond closed 19 ticks lower at 104-13, while the March 10-year note closed 7 ticks lower at 105-10.5. see yields on long term bonds going up and on short term bonds going down today,is this a right direction on yield curve? And how much will be the positive effect on stock market? Thanks. And it highlights the Importance of Market Psychology in determining relative prices.
