From UBS: "Treasuries rallied as weak housing and employment data hit the newswires, and the 2s30s curve steepened another 6bps on the back of increased expectations for a rate cut this month...swap spreads were mixed on the day, with front end spreads widening again. Agencies saw light flows, and traded in line with swaps for the most part. Mortgages opened up 4 ticks wider to Treasuries, but after a flurry of buying (mainly by those reinvesting paydowns), mortgages ended 3 ticks tighter to Treasuries and 4 tighter to swaps."
From RBSGC: "10-yr yields closing at their lowest yield this year, TY closing at its best level, and 2 yr yields closing at their best level The point here is that we have what looks like the start of a technical breakout -- which we think will force people in as the data, and Fed, unfold...Ten-year notes have traded in an 88 bp range so far this year. Meaningful? Well by historic standards it means this has been a rather dull year and the tightest range since 1965. To be fair, 2005 ranks a close second with its 89 bp range, but the 5-yr average has been 112 bp and the 10-yr average is 145 bp. The point is that for 10s now to extend the range merely to the match the recent average a rally of 24 bp is in order, taking the yield to about 4.23%. 2s have also been less volatile than normal, though not as dramatically as 10s. The range this year at 119 bp is better than some recent history (102 bp in '06, 111 bp in '03) but less than the 5-yr norm at 172 bp and 10-yr average at 129 bp. So to reach merely the recent average would require 2s to reach to about 3.90%."
From Dow Jones: "The dollar lost ground Wednesday and briefly dipped as low as Y115 on signs of weakness in the economy, which also pulled the Dow Jones Industrial Average into the red and perpetuated an unwind in the carry trade. Despite assurances in the Fed’s Beige Book that the economic effects of market turmoil so far have been “limited,” the dollar slunk lower after its release...Stocks took another leg down as interest-rate uncertainty worsened a selloff caused by another grim report from the housing sector earlier in the session...Crude oil futures held steady near a one-month closing high..."
2y Treasury yield -12 at 4.01%
5y Treasury yield -11 at 4.15%
10y Treasury yield -8 at 4.46% 30y Treasury yield -6 at 4.77%
Dow -143 at13,305
S&P -17 at 1472
Dollar index -.26 at 80.61
Yen -1.1 at 115.2
Euro unch at 1.365
Oil +.82 at $75.90
10y Treasury yield Chart
From RBSGC: "10-yr yields closing at their lowest yield this year, TY closing at its best level, and 2 yr yields closing at their best level The point here is that we have what looks like the start of a technical breakout -- which we think will force people in as the data, and Fed, unfold...Ten-year notes have traded in an 88 bp range so far this year. Meaningful? Well by historic standards it means this has been a rather dull year and the tightest range since 1965. To be fair, 2005 ranks a close second with its 89 bp range, but the 5-yr average has been 112 bp and the 10-yr average is 145 bp. The point is that for 10s now to extend the range merely to the match the recent average a rally of 24 bp is in order, taking the yield to about 4.23%. 2s have also been less volatile than normal, though not as dramatically as 10s. The range this year at 119 bp is better than some recent history (102 bp in '06, 111 bp in '03) but less than the 5-yr norm at 172 bp and 10-yr average at 129 bp. So to reach merely the recent average would require 2s to reach to about 3.90%."
From Dow Jones: "The dollar lost ground Wednesday and briefly dipped as low as Y115 on signs of weakness in the economy, which also pulled the Dow Jones Industrial Average into the red and perpetuated an unwind in the carry trade. Despite assurances in the Fed’s Beige Book that the economic effects of market turmoil so far have been “limited,” the dollar slunk lower after its release...Stocks took another leg down as interest-rate uncertainty worsened a selloff caused by another grim report from the housing sector earlier in the session...Crude oil futures held steady near a one-month closing high..."
2y Treasury yield -12 at 4.01%
5y Treasury yield -11 at 4.15%
10y Treasury yield -8 at 4.46% 30y Treasury yield -6 at 4.77%
Dow -143 at13,305
S&P -17 at 1472
Dollar index -.26 at 80.61
Yen -1.1 at 115.2
Euro unch at 1.365
Oil +.82 at $75.90
10y Treasury yield Chart
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