SubscribeDaily Futures Commentary April 30, 2009
Thursday, April 30, 2009
June Treasury Bonds and Treasury Notes are trading lower but inside of yesterday’s range. Both treasury markets have worked their way below their March lows following a three-day 2, 5 and 7 year note auction and the conclusion of the 2-day FOMC meeting.
The significance of working below the March lows has yet to be determined. All we now know is that yields are higher than when the Fed announced a trillion dollar asset buyback plan on March 18.
The Treasuries rallied substantially following the announcement of the buy-back at that time with the bonds moving over 9 handles. Since then bonds and notes have gradually declined as yields rose. All of this took place while the Fed made several asset purchases and the Treasury offered more debt to the public.
What is clear is that the Fed’s action is designed to keep mortgage rates down to stimulate demand for housing and the Treasury’s move is to raise money to pay for the stimulus plans. What isn’t clear is how much more will the Fed allow interest rates to rise before making an aggressive …
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