Friday, December 17, 2010

Treasuries Soar on European Debt Concerns

Thank god it's Friday!  Things are quiet for the most part.  I was happy to see treasuries rally today. 

Here is the 10 year:


Quick Take:

PHEW!  I am not looking forward to bond Armageddon and I would have hated to see it right before Christmas.  The Wall St Journal reported that treasuries rallied as a result of European flight to safety trades:

"The bond market extended Thursday's rally, a relief for a market that has been hammered over the past week. The benchmark 10-year note's yield, which moves inversely to its price, fell by about 16 basis points from the seven-month peak of 3.568% hit Thursday.

Many investors bought Treasury's after Moody's downgraded Ireland's sovereign credit ratings by five notches amid worries about the euro-zone debt crisis.

"Negative news from Europe spurred flight-to-safety flows into Treasurys," said Jason Rogan, director of U.S. government trading in New York at Guggenheim Partners LLC, adding that some foreign central banks and investment funds bought Treasurys with 10-year yield around 3.55%, providing attractive value.


As of 10:49 a.m. EST, the 10-year note was 8/32 higher to yield 3.405%. The 30-year bond was 22/32 higher to yield 4.498%.

The bond market is "oversold," said James Combias, head of U.S. Treasury trading at Mizuho Securities USA Inc."

The Bottom Line:

Everything else is pretty much a snoozefest today.  Metals are up a bit.  Stocks are flat.

I gotta be honest: I am looking forward to shutting it down for the holidays.  All of this impending doom is quite tiring and stressful.

FYI,  the blog will be hit and miss over the next two weeks.  I will be pretty regular next week.  This weekend and the holiday week might get a bit quiet.  Don't be fooled though:  The Housing Time Bomb will be back in full gear as we head into next year!

Let me wrap things up for today.

I have a feeling that Europe will be center stage as we head into 2011.  It will be interesting to see what bonds do in the meantime.

Christmas came early for the Fed this year.  Their gift was the European debt crisis.  It's creating huge revenue streams for treasuries as the Europeans flock to safety.  It's also taking the focus off of the US and our own debt issues and placing it on the squarely on the PIIGS.

Some advice:

Enjoy the holidays with your family because I expect 2011 to come in with a whirlwind.

We are nearing the tipping point of this whole crisis.  How it all plays out remains to be seen, but one thing is becoming very clear:   Radical change is coming and life as we know it will never be the same.

I know it's hard but try and forget about our economic insanity for now and enjoy some time with your family. 

I'll end today with a little holiday cheer!

3 comments:

CT-Hilltopper said...

Happy Holidays, Jeff!

getyourselfconnected said...

Have a great holiday Jeff! Drop me a line so we can catch up some time if you get free time. All my best.

Jeff said...

Thanks u 2!

Happy holidays!

Get, ill be on touch.