Anybody else short US 30 Bond

[Topsurfi]

by the way another very simple reason is why bond prices are falling is because there is simply less demand from asia.
When US was consuming a lot and widening its trade deficit the money flowing to china has been invested in Bonds.
The lack of consuming is now eventually shrinking this demand and on top of that china has its own problems now and might buy even less bonds.
As I have always said ZB will fall below 100 within the next 2 years, thats a given for me. The thing is only how long the FED can fight it by verbal and real interventions in the open market.

 

[number22]

Quote from Topsurfi:

As I have always said ZB will fall below 100 within the next 2 years, thats a given for me. The thing is only how long the FED can fight it by verbal and real interventions in the open market.

By looking at US currency rate to basket of other currencies, FED is probably buying some of it slowly in the open market. Gold wouldn't jump $40 in single session for no reason.

 

[comintel]

Quote from number22:

By looking at US currency rate to basket of other currencies, FED is probably buying some of it slowly in the open market. Gold wouldn't jump $40 in single session for no reason.

If so, it is going to be great ride up from here.

As to how long the Fed could bid long-term Treasuries up, I would estimate at least 2 years, probably longer. The Japanese bid up their long bond for about that long when they did quantitative easing - they took their long term interest rate down to 0.5 per cent. And the Japanese long bond only finally collapsed when they signalled they were done with easing.

 

[invertedCurve]

Quote from comintel:

It may fall a little further but the Fed is not going to let it fall too far because that would wreck plans to revive the mortgage market.

I only trade intra-day as there is a 2-3 handle range every day but I would like to point out what is the most important thing to all markets right now? CREDIT! Extension of, ability to get and ability to extend to. What one thing helps do that? Steep curve, sure the markets are shaky so the short end is still bid but I think technically speaking the long end is done. But I have the ability to say things because I do not put positions on and let them run 3-5 handles+ against me and sell or buy more in the hole like a lot of people who blew out this fall. A 4% 30 year loan is really not that different from a 5% loan still some of the lowest historically but the ability to lend to that entity is key. From a source my group reads from on friday "Hedge Funds are long the curve" -when we figure that out maybe time to reverse who knows? TRADE WHAT YOU SEE NOT WHAT YOU THINK!

 

[comintel]

It's interesting that the 10 year German Bund future also turned down from a short term high around Jan. 15.

http://futuresource.quote.com/charts/charts.jsp?s=GB H9-DT&o=&a=D&z=610x300&d=medium&b=bar&st=


I guess that corporate debt markets must be improving a bit world-wide (at least for now) so some money is flowing out of sovereign bonds.

 

[zboy2854A]

Looks like China may throw a fly in the Fed's "ointment". From Friday's Nikkei newswire...

"BEIJING (Nikkei)--Calls are growing in China for the government to reduce its holdings of U.S. Treasury securities, as some observers expect their prices to decline amid heavy issuance to fund U.S. economic stimulus plans.

Such sentiment -- in part motivated by indignation over recent American assertions that China is partially responsible for the global financial crisis-- threatens to cast a cloud over relations between Beijing and the new U.S.
administration.

"China should sell some of its U.S. government bonds and increase its euro and yen assets," Yu Yongding, a former member of the People's Bank of China's policy board, wrote in a Chinese newspaper earlier this month. Yu warned that the supply of Treasuries may far exceed demand in the future.

Such remarks by Yu, who currently serves as director-general of the Chinese Academy of Social Sciences' Institute of World Economics and Politics, has sparked discussion within the government on how to manage its foreign reserves, according to a source familiar with the matter."

This is the year of the Ox. Looks like Treasuries are going to get plowed.

 

[Topsurfi]

Quote from zboy2854A:

Looks like China may throw a fly in the Fed's "ointment". From Friday's Nikkei newswire...
This is the year of the Ox. Looks like Treasuries are going to get plowed.

wheres the problem ?
FED will simply buy it all and put it in their balance sheet.
Its wopping 2 trillion anyway so another trillion can't hurt.
Problem is that once the FED holds a trillion long bonds who will be there on the next auction ???
Lets wait for wednesday. There is an enormous pressure now on bernanke to show that he is able to avoid further steepening of the curve. If he can't convice the market this will be waterloo for bonds. I don't want to be in his position.
Another way to profite from the coming bond crash is to short US-Dollar.

 

[zboy2854A]

Quote from Topsurfi:

wheres the problem ?
FED will simply buy it all and put it in their balance sheet.
Its wopping 2 trillion anyway so another trillion can't hurt.
Problem is that once the FED holds a trillion long bonds who will be there on the next auction ???
Lets wait for wednesday. There is an enormous pressure now on bernanke to show that he is able to avoid further steepening of the curve. If he can't convice the market this will be waterloo for bonds. I don't want to be in his position.
Another way to profite from the coming bond crash is to short US-Dollar.

Indeed, I'm looking at going long GBP against the Dollar. Jimmy Rogers is always a good contrarian indicator..

 

[invertedCurve]

in my short experience of trading futures/cash (6 years) I dont remember TIPS and other auctions having so much effect on the market just crazy yesterday bid all afternoon couldn't sell off now spooz rally 20 overnight and now like a hot knife thorugh butter down insane! I guess the tails are so big now and everyone trying to frontrun the Fed in buying; which they have not done yet. It is going to be ugly if they hint today that they are not going to buy the long end we shall see.

 

[invertedCurve]

Quote from invertedCurve:

It is going to be ugly if they hint today that they are not going to buy the long end we shall see.

I hope you all were short! 126.18 is 50% retracement of whole move in ZB we only pierced it once in the afternoon session yesterday low today was 126.16 in the am that level should be good for a bounce area or area of interest now going in the future. I bought 126.19 yesterday and took a nice profit out of em, good luck and good trading I caught the pop this morning in ZN and am heading home.