Breakout coming soon. Direction?
Posted by Don on Jun 17, 2010
For the past month, bonds have been trading in a relatively narrow range: between 3.13 and 3.42%, with the average being 3.26%. In technical trading, this is known as a convergence: In short, when any investment trades in a narrower and narrower range, it will shortly break out significantly to either one side or the other — kind of like a trigger mechanism that gets more and more fragile...
Read MoreSale today; Euro affect on US expected to be mild.
Posted by Don on Jun 9, 2010
Rates are slightly up on the opening on the two news items in the header. Yesterday, Bernanke said in testimony at a House Budget Committee hearing that the impact of the European debt crisis on U.S. growth is “likely to be modest” if financial markets “continue to stabilize”. This “positive-US” news worked to raise rates slightly. Secondly, we are in the middle of a $70 billion bond...
Read MoreStill with downward trend.
Posted by Don on Jun 8, 2010
News is largely what it was: The European zone continues to experience challenges, the latest being a Fitch discussion of downgrade to UK. It is largely believed that Greece will sooner or later default, and the whole sustainability of the Euro is somewhat believed to be limited. On the domestic front, the US economic signs are not as “hot” as were first portrayed: We’re still...
Read MoreSideways to down
Posted by Don on Jun 1, 2010
Bias is still toward “flight to quality” as things are still very shaky in the Euro zone. In addition, China’s economic reports are coming out pointing to an economic slowdown in that country. Our own reports are showing increasing positive economic news, one item of which is factory orders, which have gone up now ten months straight. All of this moves sentiment (and money)...
Read MoreStable on news. 3.31%
Posted by Don on May 28, 2010
Rates are stable on news. European news includes a downgrade on Spain’s credit ratings from Fitch Ratings, from AAA, which said the country’s debt burden is likely to weigh on economic growth. The ratings were cut one step to AA+. Domestically, news points to the reality that, although recovering, the economy is still in slow recovery. Treasury yields are expected to remain low “this...
Read MoreStable after opening higher.
Posted by Don on May 27, 2010
Interest rates saw a slight rise overnight, but are likely stable in this (as of post) 3.32% range. The European concerns have calmed a little bit; helped by an announcement from China that the Greece situation has not changed their plans for long term diversification into European Assets (read, my beloved Volvo brand, for one.) So the flow to US bonds has ebbed a bit. Moreover, weighing down...
Read MoreLower; but technicals are overbought.
Posted by Don on May 25, 2010
The bond market is markedly higher (interest rates lower) on continuing expectation out of Europe. Spain, widely believed to be the next country under Greek-like distress, has taken over one of it’s non-performing banks. Now, this is isolated, and not systemic; but the fact remains that there are real lingering questions in the investment community as to whether the European assistance...
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