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Tuesday, December 4, 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 • Gus Koppen

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
11/27/18 2.31 2.41 2.53 2.70 2.83 2.86 2.89 2.98 3.06 3.22 3.32
11/28/18 2.31 2.40 2.53 2.69 2.81 2.84 2.87 2.97 3.06 3.23 3.34
11/29/18 2.31 2.37 2.52 2.69 2.81 2.83 2.85 2.94 3.03 3.21 3.33
11/30/18 2.31 2.37 2.52 2.70 2.80 2.83 2.84 2.92 3.01 3.19 3.30
12/3/18 2.30 2.38 2.56 2.72 2.83 2.84 2.83 2.90 2.98 3.15 3.27
                                                                                                                                      Source: U.S. Department of the Treasury, as of 12/3/2018
Inversion
 
We are just shy of seven months from reaching the number one spot for the longest recovery period post-recession. The Fed will likely wrap up their rate hikes with only a few more possible increases within the next year.  As short term rates have come up in unison with the overnight rate, the long end of the curve has not.  This has narrowed the spreads drastically between benchmarks and has captured investors’ attention.
 
The most popular relationship to watch has been the 2-10yr Treasuries as they have different triggers that move them.  These market moving events have been flattening the yield curve.  The spread between the 2yr and 10yr is at an all-time low for this cycle sitting at 12.5bps this morning.  Yesterday, for the first time in the cycle there was an inversion.  Both the 2yr and 3yr USTN rose above the 5yr and are still higher in yield.  The 2yr is 2.823%, +0.9bps to the 5yr and the 3yr is 2.827%, +1.3bps to the 5yr. 
 
That being said, this presents an optimal buying opportunity in the short end.  Let us know how we can help.
 


                                                                                                                                 Source: Bloomberg L..P. as of 12/4/18


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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