Friday, February 19, 2010

US Treasury Bonds Selloff - follow-up call

I'm happy I made that call right on top of the market and it did selloff after it. I didn't have position so it is only an intellectual satisfaction with my analysis.

After yesterday FED raised the Fed borrowing window to 0.75 bp it makes sense to think on the aggregate intelligence of the market - seems markets were anticipating that move so they started creeping higher 2 weeks prior to the actual news was released.

2 / 10-year bond spreads are signalling a possible steepening which is bullish for the economy.

While on dailies the moves are pretty rangy the Weeklies have strong signals on technical indicators as well as inside the trending channel that the spreads is moving toward steepening.

10-year UST Note yiled bounced off the 3.60% support and is moving higher with first target/resistance around 3.85/89.

10-year UST Note has an immediate target around 116.90 with further focus on 116.50.

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