| Tuesday, January 15, 2019 |
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| 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 • Gus Koppen |
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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 |
| 01/08/19 | 2.40 | 2.46 | 2.54 | 2.60 | 2.58 | 2.57 | 2.58 | 2.63 | 2.73 | 2.88 | 3.00 |
| 01/09/19 | 2.40 | 2.45 | 2.52 | 2.59 | 2.56 | 2.54 | 2.57 | 2.64 | 2.74 | 2.90 | 3.03 |
| 01/10/19 | 2.42 | 2.43 | 2.51 | 2.59 | 2.56 | 2.54 | 2.56 | 2.63 | 2.74 | 2.92 | 3.06 |
| 01/11/19 | 2.41 | 2.43 | 2.50 | 2.58 | 2.55 | 2.51 | 2.52 | 2.60 | 2.71 | 2.90 | 3.04 |
| 01/14/19 | 2.42 | 2.45 | 2.52 | 2.57 | 2.53 | 2.51 | 2.53 | 2.60 | 2.71 | 2.91 | 3.06 |
Source: U.S. Department of the Treasury, as of 01/14/2019
Attractive Spot on U.S. Agencies
The recent word from the financial based media has been focused on the flattening and inverting of the U.S. Treasury yield curve. While this is an important development, it is not the only sector that needs attention.
The one-year Treasury yield has spiked and does warrant considering in your portfolio, but it should not be over weighted. The U.S. agency curve, on the other hand, remains steep and especially attractive in the seven to ten year range. The yield curves below show full yield comparison of both U.S. Treasuries and Agencies.
The one-year Treasury yield has spiked and does warrant considering in your portfolio, but it should not be over weighted. The U.S. agency curve, on the other hand, remains steep and especially attractive in the seven to ten year range. The yield curves below show full yield comparison of both U.S. Treasuries and Agencies.
Source: Bloomberg, L.P. Based on the Market Close 1/11/2019
In addition to agency non-callable “bullet” bonds, agency callables offer good value as well. Federal Home Loan Bank, (FHLB), recently issued a 3.50% coupon seven-year callable bond at par with a continuous call structure after one year. The 3.50% YTM/YTC compares to the current 7-year US Treasury YTM of 2.59%. An example of agency seven and ten year bullets and the new FHLB callable is below as of 1/14/2019 and is subject to change.
Please contact your portfolio representative for details on the current market availability and yield on agency bullets and callables.
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.
•Not FDIC Insured •No Bank Guarantee •May Lose Value