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Bonds Commentaries

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Are Bond Markets Questioning their Faith in Central Banks?

Are Bond Markets Questioning their Faith in Central Banks?

It took 13 months for yields at the long end of the treasury curve to move from the highs set at the end of 2013 to the lows marked at the end of January 2015, and just 3 and 1/2 months to retrace halfway back. (See chart below).  The sell off in the long end the past month and a half has been significant, both in the US and in other fixed income markets across the globe.  For example, the...

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Steeper Curve Bias as Inflationary Impulses Bubble.

Steeper Curve Bias as Inflationary Impulses Bubble.

Below is a chart of front month Crude Oil, (green line) versus 5/10 treasury spread, (white bar chart).  As crude oil declined through the end of 2014, the 5/10 treasury curve flattened, which makes sense, as inflation expectations were squeezed out of the market.  However, since March, oil appears to have bottomed, the curve has become less contango, and several measures of inflation...

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