Interest Rate Roundup

Tuesday, April 28, 2009

U.S. Treasury market blitzed with selling

There's some interesting market action in the Treasury arena today. The long bond futures are getting blitzed, with a price decline of 1 2/32 at last check. Moreover, the yield on the 10-year note is once again testing the 3% area (a gain of about 10 basis points on the day).

The immediate catalyst appears to be the slightly worse-than-expected auction of a record $35 billion in 5-year Treasury Notes. They went off at a yield of 1.94%, compared with pre-auction expectations for a reading of 1.92%, according to Bloomberg. But the bigger-picture issues (in my humble opinion) remain the flood of supply hitting the market, the exploding budget deficit, and the trashing of the Fed's balance sheet, among other things.


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