boz

Got Bonds

270 posts in this topic

australia is also getting a short term yield higher then long term. I think it is the only wester country to get lower rates higher then longer rates (10 year).

wonder if cobran can plot a chart with the spread between 90 day bill and 10 year yield, may be some indication and link with economy status will emerge...

http://www.bloomberg.com/markets/rates-bonds/government-bonds/australia/

Brazil's got a funny 'curve' as well.

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australia is also getting a short term yield higher then long term. I think it is the only wester country to get lower rates higher then longer rates (10 year).

wonder if cobran can plot a chart with the spread between 90 day bill and 10 year yield, may be some indication and link with economy status will emerge...

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thanks Cobran,

seems a good way to see if the RBA monetary policy is expansionary or not and we stand at zero level now.

probably if economy will keep going well we'll end up with a positive spread of shorter rates higher then longer one. If we'll get into bad time we might get a spike up like in GFC but then RBA will bring down the short rates (or try to)

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Thanks cobran.

Looks like the only thing that can break us from that cycle is a civil war... Otherwise it is pretty consistent except the magnitude can vary. I'm racking another notch up for the inflationists now as I cannot see higher rates (which seems decidedly certain looking at that graph!) without inflation with modern currencies / central banking.

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[quote name-'cobran20', on 30 June 2010 - 08:51 PM, said:

The 90 day yields have risen a bit more, but the 10 year bond yields are heading south after that false break to the upside in April. The media have been projecting further rate rises later this year. Perhaps the 10 year bond yields might surprise them?

There I was 3 weeks ago getting bullish about our 90 day yields when they spiked, only to now be looking at an island reversal. Just hope those yields don't fall away. :dontgetit:

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I always had the feeling bond tells you a lot even if it more like an art to see it.

Gross Says Rise in 10-Year May Signify Fed Success

By Susanne Walker and Tom Keene

Oct. 28 (Bloomberg) -- Bill Gross, manager of the world’s largest bond fund at Pacific Investment Management Co., said a rise in 10-year Treasury note yields would signify success by the Federal Reserve in reviving inflation and economic growth.

“If it does work, here’s why the 10-year goes down in yield then back in yield, it’s because the out years, five, six, seven, eight, nine and 10 are vulnerable to inflation and higher policy rates in those particular years,” Gross said in an interview today on “Bloomberg Surveillance” with Tom Keene.

The Fed, led by Chairman Ben S. Bernanke, will announce another round of large-scale asset purchases when policy makers meet next week after deploying $1.7 trillion to pull the economy out of the financial crisis, according to a survey of the 18 primary dealers that trade debt with the central bank. Fed officials, who already cut interest rates almost to zero, are discussing more purchases of Treasuries to flood markets with cheap money as well as strategies for raising inflation expectations to prevent stagnating prices from undermining the recovery.

Gross, a founder and co-chief investment officer of Pimco, said yesterday in his monthly commentary that a renewal of asset purchases by the central bank will likely indicate the end of the 30-year bull market in bonds. Treasury yields near historically low levels in part because of Fed asset purchases make it mathematically impossible for bonds to do much better, he said today.

“It’s not an end from the standpoint of over-the-cliff or over the edge,” Gross said. “It’s not a Columbus thing where he thought he was sailing off the ocean and may fall off the edge. It’s an end from the standpoint of recognizing that certain maturities can’t go much lower in yield.”

Total Return Fund

Gross has reduced holdings of government-related debt in the Total Return Fund for the third straight month in September, after the securities accounted for 63 percent of assets in June, the highest since it held an equal amount in October 2009.

The yield on the 10-year Treasury note dropped from a 2010 high of 4.01 percent in April to a low of 2.33 percent on Oct. 8, according to Bloomberg data, as investors purchased Treasuries in anticipation of further asset purchases by the central bank. The record of 2.04 percent was set in December 2008.

Pimco added to its mortgage holdings in September to 28 percent of assets, from 21 percent the prior month. Pimco also expanded its emerging-market debt to 12 percent last month, the highest since at least September 2006. Non-U.S. developed debt was unchanged at 6 percent.

The Total Return Fund, also the world’s biggest mutual fund, handed investors a gain of about 11.09 percent in the past year, beating about 76 percent of its peers, according to data compiled by Bloomberg. Pimco, a unit of Munich-based insurer Allianz SE, managed $1.236 trillion of assets as of September.

To contact the reporter on this story: Susanne Walker in New York at swalker33@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Last Updated: October 28, 2010 13:42 EDT

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There I was 3 weeks ago getting bullish about our 90 day yields when they spiked, only to now be looking at an island reversal. Just hope those yields don't fall away. :dontgetit:

Unlike the past, unfortunately the 90 day yields no longer provide advanced warning of what the RBA is likely to do with official interest rates. Let's hope they now clear 5% to continue to my long term target of 5.5%.

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Unlike the past, unfortunately the 90 day yields no longer provide advanced warning of what the RBA is likely to do with official interest rates. Let's hope they now clear 5% to continue to my long term target of 5.5%.

The yields have broken above 5%.

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The gap between bond and lower quality securities in the US is growing. Looks like yield investors are getting more risk averse.

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Bond volatility is spiking yield is rising in all major economy, US 30 years is at 4.45 and 10 years getting close to 3%. Uk 10 year is spiking to at 3.27%, german and other EU countries yield is rising too.

Australia yield is also rising at 5.4%.

May be Bernanke policy is winning and inflation expectations are rising...

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Bond volatility is spiking yield is rising in all major economy, US 30 years is at 4.45 and 10 years getting close to 3%. Uk 10 year is spiking to at 3.27%, german and other EU countries yield is rising too.

Australia yield is also rising at 5.4%.

May be Bernanke policy is winning and inflation expectations are rising...

Maybe you're the eternal optimist - boz.

The only reason bonds are enjoying a temporary reprieve is because; nobody knows where to put their wealth now to keep it secure.

For a while there, they thought it might be safe in AUD, but that's looking just a little fragile at the moment due to house price tip over.

Investments in Asia, looked safe too, for a while, until China, began to wind back inflation worries.

There is still investment in emerging economies, but they are still a little volatile.

Everything is looking like custard, and people are piling in to whatever is considered the next best thing.

They are going to lose it all, if they are not careful.

Oh well, win some, lose some.

We were never meant to have more than we need to simply live anyhow. The rest is greed.

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I am back in a bond watch mode, today German bond had a bit of a rally in yield, a bit surprising as usually they fall in yield when trouble are growing in PIGS nations. may be that is a sign of something fundamental on bond yield rising? Aslo later last night bad data came out of US like lower PPI and industrial production that pushed yield of US bond down with sharemarket, deflation fear is already back in USA?

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Looks like the bounce has started.

I hope Ben is not too surprised at what the bond market thinks of his QE1...n policy. Otherwise he is a bigger idiot that what I suspected!

Still, the yield need to rise substantially more to confirm a long term breakout. But the 2008 low has now been holding for a couple of years. So it continues to reaffirm that the trend in rates is up.

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I hope Ben is not too surprised at what the bond market thinks of his QE1...n policy. Otherwise he is a bigger idiot that what I suspected!

Still, the yield need to rise substantially more to confirm a long term breakout. But the 2008 low has now been holding for a couple of years. So it continues to reaffirm that the trend in rates is up.

I was about to write on this thread too as bond yields have been skyrocketing in the last week, this is not just for USA like you see from cobran charts, it range from Japan, to Australia, Germany, UK, France, etc.

I also agree with Cobran that QE is doing no good for US bonds, the benchmark I use to value them is in relation to the Canadian bonds, specifically with the 10 year term bond, yesterday for the first time in months the US bond yield overtook Canada 10 year bond yield

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hang on , USA the safest place for money is paying more to borrow than Canada?

I wonder if this is the deleverage that peter schiff got so wrong before the GFC?

maybe now the world is going to follow on Chinas coat tail? he jut got the dates wrong.

we will know soon as china raises its interest rates this weekend, and see how the rest of the world responds

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we will know soon as china raises its interest rates this weekend, and see how the rest of the world responds

Stock markets should get the wobbles for a week or two!

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hang on , USA the safest place for money is paying more to borrow than Canada?

I wonder if this is the deleverage that peter schiff got so wrong before the GFC?

maybe now the world is going to follow on Chinas coat tail? he jut got the dates wrong.

we will know soon as china raises its interest rates this weekend, and see how the rest of the world responds

they pay more for the long term maturity, I think it was like that also during the QE number one, I think the main reason is that Canada budget number are far better then USA and that pay off for long term maturity, USA is also paying more then several other country like GErmany, Japan but also Singapore and HK Kong.

Anyway, overnight the USA budget numbers for November were released and here they are:

Treasury says: U.S. BUDGET DEFICIT: Outlays rose 18% to $299.4 billion in November, while revenue rose 12% to $149 billion.

so net deficit is 150.4 bil$, I think it is madness that the world speculation is focusing on PIGS while US and UK have far worse numbers, it is time for the bond vigilantes to wake up...

Edited by boz

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yeah i think i was getting at that the world follow US interest rates, if things are heating up there, usually the world follows. only going by the fact world interest rates been at all time lows following us's stimulus for last 10 years, and the big %20 rates back in the 80's, alll driven by the US market.,

just wondering if its about to shift to follow Chinas lead not US prob not, either way both seems to be going up very soon

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I hope Ben is not too surprised at what the bond market thinks of his QE1...n policy. Otherwise he is a bigger idiot that what I suspected!

Still, the yield need to rise substantially more to confirm a long term breakout. But the 2008 low has now been holding for a couple of years. So it continues to reaffirm that the trend in rates is up.

Since mortgage rates in the US are set based on the 30 year bond yields, Ben is going to have some explaining to do in the not too distant future!

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http://www.marketwatch.com/story/china-cuts-treasury-holdings-in-november-2011-01-18

Jan. 18, 2011, 10:59 p.m. EST

China cuts Treasury holdings in November

HONG KONG (MarketWatch) -- China cut its holding of U.S. Treasurys in November by $23 billion, though its overall holdings remained the largest of any foreign nation at $895.6 billion, according to data released Tuesday by the Treasury Department. The decline followed net purchases by China of more than $23 billion in October, which lifted its holdings $906.8 billion, the highest level since November 2009, according to data contained in the monthly Treasury International Capital report.

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Since mortgage rates in the US are set based on the 30 year bond yields, Ben is going to have some explaining to do in the not too distant future!

Ben's halted the printing press in November so the long rates will stop rising.

Ben is trying to walk a fine line between inflation and credit crunch.

Edited by wulfgar

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