Guys, still fairly new to financials and the curve, Jsut looking at the curve now it all looks quite flat apart from where it falls away at the 2yr. Any specific reason for the dip down to the 2?
Thanks.
Thanks.
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Yield Curve Basics
- Thread starter maninjapan
- Start date
You mean it looks steep up to two years?
Think of where the fed funds rate is now and you will have your explanation of why it's so low at the very front. After that, up to 3 years or so, the mkt is pricing in the need for the Fed to exit the monetary easing very aggressively.
As to further out, that's where it gets interesting and you will hear a lot of different views.
Think of where the fed funds rate is now and you will have your explanation of why it's so low at the very front. After that, up to 3 years or so, the mkt is pricing in the need for the Fed to exit the monetary easing very aggressively.
As to further out, that's where it gets interesting and you will hear a lot of different views.
Martinghoul, thansk for the reply. That makes sense about the short term end of the curve. Anyone with some of the more accepted reasons for the jump to the 10-30yr part of the curve and being relatively flat?
Quote from maninjapan:
Martinghoul, thansk for the reply. That makes sense about the short term end of the curve. Anyone with some of the more accepted reasons for the jump to the 10-30yr part of the curve and being relatively flat?
they placed the last part of the 10-30Y reopening legs and are happy to bank on them!
Bernard, Im still not sure Im gettign the lingo, if anyone can post a link that gives more of an insight into the basics of these products it would be much appreciated. Not sure what reopenings are.......
I knew i was getting in over my head, but everyones gotta start somewhere....
I knew i was getting in over my head, but everyones gotta start somewhere....
Quote from maninjapan:
Bernard, Im still not sure Im gettign the lingo, if anyone can post a link that gives more of an insight into the basics of these products it would be much appreciated. Not sure what reopenings are.......
I knew i was getting in over my head, but everyones gotta start somewhere....
The Treasury sometimes âreopensâ a security by selling additional amounts of an outstanding issue at auction.
http://www.newyorkfed.org/research/current_issues/ci11-2/ci11-2.html
some more general info
http://www.bloomberg.com/apps/news?pid=20601087&sid=acLkvdIwcqKw
There's actually all sorts of reasons for this, but they all sorta come down to many supply/demand considerations, such as issuance patters, structured notes (PRDC) overhang, pension fund/foreign CB demand etc etc. There's just too many factors to mention.Quote from maninjapan:
Martinghoul, thansk for the reply. That makes sense about the short term end of the curve. Anyone with some of the more accepted reasons for the jump to the 10-30yr part of the curve and being relatively flat?