Tuesday, February 13, 2018
MANAGING DIRECTOR: Scott Carrithers   PORTFOLIO SALES AND SERVICE: Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty Kevin Doyle • Lonnie Harris •  Mark Tranckino • Robert Schuyler • Tom Toburen • Josh Kiefer  Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell

US Treasury Market
Date	1 mo	3 mo	6 mo	1 yr	2 yr	3 yr	5 yr	7 yr	10 yr	20 yr	30 yr
2/6/18	1.48	1.52	1.69	1.87	2.10	2.30	2.52	2.70	2.79	2.94	3.06
2/7/18	1.36	1.55	1.73	1.91	2.15	2.33	2.57	2.75	2.84	3.01	3.12
2/8/18	1.32	1.55	1.73	1.91	2.13	2.32	2.57	2.76	2.85	3.03	3.14
2/9/18	1.31	1.55	1.73	1.89	2.05	2.26	2.52	2.72	2.83	3.02	3.14
2/12/18	1.35	1.62	1.82	1.93	2.09	2.30	2.56	2.77	2.86	3.02	3.14

                                                                                      Source: U.S. Department of the Treasury, as of 2/12/18  

The Seven Year Itch…Scratch It!

For the second time in seven years, fixed income investors are able to acquire five year Treasury Notes at a nominal yield in excess of 2.50%.  Scratching a seven year itch is always rewarding, especially when done within the most explicit, broadly traded, liquid and efficient markets on the globe: US Treasuries.

Some will buy and hold for the 2.50%+ nominal yield.  Others will buy and roll down the curve with the expectation of selling prior to maturity earning a total return (yield + price action) in excess of the nominal yield.  Of course the chief risk to that approach is that yields rise, prices fall and total return is diminished.  And with Fed rate hike expectations rising, that’s a genuine risk.  But holding is a legitimate strategy as well.  Even if rates move higher, at some point between now and maturity date, investors may find a speedy and profitable exit ramp.  In the meantime, you’re beating fed funds, rolling down the curve and remaining a positive carry for as much as four 25bps rate hikes from now.

Please call your CCB Capital Markets rep for a pro/con analysis and follow-up.

Source: Bloomberg LP 2/13/18

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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