We first discussed the historic extreme in the spread between German Bunds and U.S. Treasuries last April (here). And that relationship has continued since, propelling the difference (in red, below) to levels well above those reached over the last two decades: (Germany in blue, U.S. in...
In a nutshell, we are absolutely amazed at the amount of pain endured by speculators who are short long-term treasury bonds....
On Tuesday, the spread between the US 10-year bond and the German 10-year bond reach 180 basis points (currently at 176 basis points). This was the widest spread since May 11, 1989....
Shorting long duration treasury bonds really is becoming the modern day widow maker, as we noted last August. Yet, despite all the pain endured since last August for anyone shorting treasuries, traders still maintain a historically large short position in futures and options on the...
The story of 2014, and so far in 2015, is that yields have continued to fall contrary to most economists’ expectations. This matters to equity investors because the appropriate asset allocation in a falling yield environment is much different than the best allocation in a...
Despite the powerful rally over the last several weeks that brought the US equity markets back to their all-time highs, treasury yields are up only slightly and are well below mid-September levels....
The bullish action in the treasury bond market continued today with the 10-year yield down another 9bps and the 30-year yield down another 6bps. Bond yields are at levels not seen since the commencing of the ”taper tantrum” in the middle of 2013....
As treasury yields plunge again today to new 1-year lows (the 10 and 30-year treasury bond yields are both down 3bps to 2.33% and 3.07%, respectively), we are reminded of a popular trade over the last decade to short Japanese government bonds, which has aptly...
Ending a 66-day streak of consecutive days without a 1% down finish, the S&P500 finally succumbed to statistics as it lost about 1.2% today. Bonds and gold, on the other hand, rallied as the US 10-year treasury yield lost 7bps, the 30-year lost 6bps, and...
The Fed is set to conclude its nearly six-year-old experiment with quantitative easing (QE) and the Federal Reserve Board has clearly laid out the most likely course for termination of the program....
The exudes seen in bond funds last year has shown persistent signs of reversal in 2014. Indeed, over the last four weeks about $12.4bn flowed into bond funds (blue line). Meanwhile, equity funds, which saw positive flows throughout most of 2013 and the first few...
Bonds have had a great last few days as yields have fallen by the largest three-day amount since April of 2013. But, this rally in treasury bonds began at the start of the year and the ten-year now yields about 50bps less than it did...
With a little trading left to go, the the 10-year treasury bond is about to set a 2 1/2 month high in terms of yield. The last time the 10-year closed above 2.80% was on January 22nd....
We’ve been highlighting how S&P 500 futures and the YEN/USD cross have basically been moving tick for tick recently, so we thought it prudent to point out that the relationship has basically dissolved over the last two days, and in fact has started to reverse....
In an almost perfect ”taper on” sort of manner, stocks had their worst day since November 7th, the 10-year treasury bond sold off by 4bps, gold finished down $9.00, and the euro rose to the highest level since mid-October, and November 2011 before that....
