Bond rally nearing an end?

[gharghur2]

Hi Surdo,

Still looking at 105ish 30yr, and 104ish 10yr for the end of this move down.

 

[gharghur2]

Quote from steveosborne:

They are happy that the Fed is acknowledging that housing and growth are slowing.

And I'm happy that they're happy

 

[Surdo]

Thank you Tony!

 

[steveosborne]

Quote from gharghur2:

And I'm happy that they're happy

Well, bonds are now joining the parade because the additional inflation-risk premium that was integrated into the yield curve this morning has completely dissipated.

 

[ralph00]

I'm happy too.

 

[gharghur2]

Quote from steveosborne:

Well, bonds are now joining the parade because the additional inflation-risk premium that was integrated into the yield curve this morning has completely dissipated.

Feeding frenzy!
What happens when the euphoria wears off ?

 

[steveosborne]

The euphoria can't last very long while markets are still cautious because they still are.

 

[gharghur2]

http://www0.gsb.columbia.edu/students/organizations/follies/media/EveryBreath.wmv

check this out you'll love it!

 

[steveosborne]

Funny indeed.

 

[JohnL111]

Today’s auction of 5s was just as dismal as the previous auctions this week. It really looks like the Foreign banks are on a buyers strike. If this is the case (and I think it is highly likely) then the curve is really going to steepen. I remember reading where it was estimated that foreign demand for treasuries was keeping yields 100-200bp lower. This must be why the 10s have increased 50bp since March and swap spreads have NARROWED (and the embi spread over treasuries is at a all-time low).

I noticed that yesterday the Sep. par 30yr puts traded 20,000 with a sizable jump in open interest. We may see par much sooner than Labor Day.