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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (9804)	3/9/2004 4:34:08 PM
From: stan_hughes	Read Replies (1) \| Respond to of 110194

3:42 pm ET Bond Market Summary : Treasury yields continue to push to new 8-month lows as the 10-year closed below 3.725%, shedding 0.3% in as many days. Concern is mounting that sustained treasury action below 3.74%, and 3.68% could bring in additional, heavy mortgage-backed trades to hedge prepayment risks due to refinancing. This hedging, coupled with continued foreign central bank intervention, would depress yields even further. The Bank of Japan, for reasons ranging from "year-end profit motives," to testing the waters of what would happen if they stepped back from the supporting the dollar, removed a strong dollar bid for the second day in a row, allowing it to collapse, only to bid the market higher on intervention. The treasury market "just does not respond to any of the machinations in the currencies [today], this is looking very much like what we saw in the Japanese Government Bonds a couple years back... 2%?... 1%? 'Can't go any lower, it's a one way trade; well guess what?'" Tomorrow we look forward to January trade balance and wholesale inventories data to add some economic footing to support the substantial rise in treasuries. Tens are currently +13/32nds yielding 3.717%; two are +01/32nds 1.472%; threes +03/32nds yielding 1.881%; fives are +07/32nds yielding 2.650%; thirties are +19/32nds yielding 4.671%. NB - taken from briefing.com, but the bolding is mine