| Tuesday, August 22, 2017 | ||||||||
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MANAGING DIRECTOR: |
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US Treasury Market |
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| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 8/15/17 | .97 | 1.04 | 1.16 | 1.23 | 1.35 | 1.51 | 1.83 | 2.09 | 2.27 | 2.60 | 2.84 |
| 8/16/17 | .97 | 1.02 | 1.13 | 1.24 | 1.33 | 1.49 | 1.79 | 2.04 | 2.23 | 2.58 | 2.81 |
| 8/17/17 | .95 | 1.00 | 1.11 | 1.24 | 1.32 | 1.46 | 1.76 | 2.01 | 2.19 | 2.54 | 2.78 |
| 8/18/17 | .97 | 1.02 | 1.13 | 1.24 | 1.33 | 1.47 | 1.77 | 2.01 | 2.19 | 2.54 | 2.78 |
| 8/21/17 | .95 | 1.00 | 1.11 | 1.23 | 1.32 | 1.46 | 1.76 | 2.00 | 2.18 | 2.52 | 2.77 |
Source: U.S. Department of the Treasury, as of 8/21/17
Is the 10YR Treasury Trying to Tell Us Something?
Although the Treasury market is trying to lull us to sleep by moving sideways for a long period of time. The 10YR Treasury which is a widely watched market indicator has been inching lower very quietly over the past 30 days and is nearing a very noteworthy technical level.
We are currently 5 BPS away from the most recent support level of 2.13% (see below). A technician would suggest if the 10 Year Treasury were to break through 2.13% to the down side, there is a high probability it searches for the next support level which was set pre-election around 1.80%.
That may be a little dramatic and while we are not entirely convinced the 10YR would move that low it would not be unrealistic to see it break the all-important 2% level before year end.
The reason even a small move lower is important is because we will lose the ability to capture 2% on many of the structures we have been recently recommending on the belly of the curve. Therefore, if you are a believer in technical analysis, keep an eye on the 10YR Treasury. If it happens to break through the 2.13% consider employing excess liquidity into whatever structure meets your balance sheet needs. If you need help deciding what may best fit your needs, reach out to us. That is what we are here for.
Source: Bloomberg, L.P.
This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.
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