Tuesday, September 20, 2011

Special Market Report: FED Prep - 30 Yr Treasury Yields vs. 10 Yr Note Yields (George Cavaligos)

Special Market Report: FED Prep - 30 Yr Treasury Yields vs. 10 Yr Note Yields (George Cavaligos)SocialTwist Tell-a-Friend
MF Global Bond trader George Cavaligos discusses the FOMC meeting and that the Federal Reserve could use yields as one of it's tools to help the economy.

According to George:
" 30yr treasury yields are the only part of the Treasury curve not to get below the 2008 lows at this point. That fact has me favoring the FOMC meeting moving towards an "Operation Twist" that will target this fact and try to push 30yr yields down. The 2008 lows in 30yr was 2.52% and bonds are currently yielding 3.21% that 0.69% difference may be enough to help stabilize the economy, or at least put a floor under it. We continue to like buying dips in the bonds and would take a look at selling the notes/bonds spread that we floor traders' call the NOB spread. In the futures pits we usually use a ratio to equate the different contracts of 10 T-Notes to 6 T-Bonds."

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