Bond rally nearing an end?
- Thread starter gharghur2
- Start date
Yes, -- let's wait for Mcurto insights and scenario! 
Alright, here is my take on things. The difference between this rally and past rallies is that it manifested itself on credit market worries (subprimes) and we saw all spread product go into a huge widening phase and everyone shift quickly into Treasuries. These flows into Treasuries were still less than their benchmark indices (in terms of duration), so even with the major allocation shift the market remained somewhat short on the way up. Data has been pretty solid to mixed and the 2yr futures market (3 times available cheapest to deliver, actually a new CFTC record) has managed to get really short at this point. I am not sure if downside is limited quite yet because have not heard much in the way of foreign buying flows, maybe a test back toward 10yr 106-05 to 12 area and we will see those flows again (quite strong down there last time). Upside still seems to be limited in terms of mortgage call buying (as they were in and out of June 108, 107.5, and 107 puts as we were rangebound above 108) so can't see a reason to breakout there unless spreads narrow next time on way up. Right now could envision some consolidation around 107-11 (200-day moving average, will attract some fund buying, always does) and a further push back toward high volume from 106-25 to 19 area if data remains strong. If it softens up expect the 2yr to lead the way higher as there are potential squeeze implications there into June.
Thanks a lot,
Bernard
Bernard
Just a little OT: anyone is able to post post a chart with the yield on 30Y and 10Y during the NFP session (obtained synthetically from intraday cash) the since on last April 6 the CBOE was closed?
The largest vendor financing scheme in history continues via the U.S. debt market.
BEIJING, April 12 (Reuters) - China's foreign exchange reserves breached $1.2 trillion in the first quarter after a record quarterly jump .... The central bank said on Thursday that reserves had swollen by $135.7 billion to $1.202 trillion between January and March, more than half the $247.3 billion reserves accumulation for the whole of 2006.
Analysts said the quarterly jump, which will have intensified upward pressure on the yuan had confounded expectations, given a narrowing in the country's trade surplus in the first three months.
BEIJING, April 12 (Reuters) - China's foreign exchange reserves breached $1.2 trillion in the first quarter after a record quarterly jump .... The central bank said on Thursday that reserves had swollen by $135.7 billion to $1.202 trillion between January and March, more than half the $247.3 billion reserves accumulation for the whole of 2006.
Analysts said the quarterly jump, which will have intensified upward pressure on the yuan had confounded expectations, given a narrowing in the country's trade surplus in the first three months.