Treasuries are at another inflection point. The 30 Year T-Bond Price is trading right under the 50dma as well as $TLT. The 200dma is falling and close buy. Yields are right above the 50d and are being squeezed in a 3 year symmetrical triangle so judgment day is upon us. The Fed finished buying Treasuries on
October 29 which propped up the market and lowered interest rates. So with decent spreads from 0-4.26% will banks (+ China) continue to support the Treasury market? Also, if the rally in risk is at it's pinnacle like
Bill Gross said, could money flow back into USTs? I understand the argument and possibly the reason why yields are hovering above the 50d at the moment. The
US National Debt is about to hit $12 trillion (up 20%+ yoy), the monetary base doubled and there are underlying
inflation and currency worries. Not too long ago TLT broke through uptrend support (
post with live TLT chart/trend). We'll see if that move can stick. The FOMC meets today and Wed so get ready for interesting moves (
preview/Danske Bank A/S). Charts below with trends: $TLT, 10Y Price, 30Y Yield, 30Y Price.
Read these Bloomberg articles:
Bank of America Joins China as Buyer of Treasuries (Update2)
Bernanke Housing Gamble May Bring Pressure to Extend Fed Aid
Fed Ends Treasury Buys That Capped Rates, Stabilized Housing
30 Year Treasury Bond Price ($USB, Courtesy of Stockcharts.com)
30 Year Bond Yield ($TYX)
10 Year Treasury Note Price
TLT, iShares Barclays 20+ Treasury Bond Fund
