Bond rally nearing an end?

True! How the market reacts to the number.

Poole was fairly straight forward. Moskow commented in Chicago and shook the markets. Then Ben said nothing! It was an interesting FED day.

I've been watching the entire sector 90-day, 2yr, 10yr, and 30yr. The shorter term yields have been roaring along for some time and will surely top out first. It appears the 2yr is the first one to show signs of exhaustion. Might have topped for a while!

Tuesday? You might have this one nailed!
 
Quote from ralph00:

^^^ I hope you're right.:)

I started building what I expect will be a large long position in 2 yrs (actually Dec 07 eurodollars) on Tuesday.

Poole has been pretty clear in 2 speeches this week that he thinks the economy is roaring ahead. I assume Fed guvs get a 'heads up' before major reports, so I would expect a pretty big number on Friday's empl. report. As is usual, the key will be how the market reacts to the big number.
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You want to capitalize on strong growth and possibly a big employment number with a long position on short maturities? (When you say <i>long position in 2-yr</i>, I'm assuming you're expecting the price to go up and not the yield.)

I didn't take any position yet but I'm considering doing the same thing for the opposite reason. If the employment number is somewhat disappointing, I might bet on a short two week rally.
 
It's all about where Germany and Japan are going right now... The bund couldn't make new lows, we got a pop in treasuries also... Now that all three areas are looking like they're in a tightening cycle, all three should be very well correlated... One of the reasons for inversion is because 4.5 sounds pretty good when you look at Japan's almost 0%... With this changing funds will likely flow to other areas where rates are more competitive...

We went out of inversion yester, saying that it was a technical unwinding... I don't quite buy it, since usually closing out positions won't retrace the entire move... I agree that the 2 year seems kinda tapped at the moment, it ran way ahead of itself but we still have until the end of the month to scare up the inflation-phobes...
 
You want to capitalize on strong growth and possibly a big employment number with a long position on short maturities? (When you say long position in 2-yr, I'm assuming you're expecting the price to go up and not the yield.)
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No. I'm just speculating what might happen on Friday. The long position I am building has nothing to do w/what the number might be. I am a position trader. I expect to build this position up over a period of weeks and hold it for a period of months (of course, if the market moves too sharply with or against me, i reserve the right to close it out:D).
 
Stone & McCarthy (Princeton) -- The 10-year note reopening today was solid, with a strong bid cover and a stop near the 100pm bid side. But the Indirect takedown was the second lowest since the Treasury began releasing the details in May of '03.
The auction stopped at 4.760%. The WI was bid at 4.758% as of the 100pm bidding deadline. At $8.0 bln, today's reopening auction was the same size as the prior three 10-year reopenings. 4.91% of bids at the high yield were accepted.

The bid cover was a strong 2.87, relative to an average of 2.34 for past 12-year note auctions, which includes both original issues and reopenings. Non-comps were low at $20 mln, although reopenings tend to see low non-comps
 
Quote from gharghur2:

A miniscule bounce from that news and a very tight trading range the last two days.
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Ya, was a little disappointed by the lack of a bounce... I may dabble in on Friday (finally outta my oil trade) but VERY small size...
 
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