Wednesday, January 10, 2007

Another day another sell-off

The 10-year is down 1/4 today on light news. Moskow and Fischer (not on the website) both seemed concerned about inflation and happy with where rates are in speeches today. That's not really news, but the market sold-off anyway. I'm suspicious that this has a lot to do with rate locking for corporate deals.

The curve is also about 1bp steeper. June FF contracts are at 94.80, which implies very low odds of a cut by then.

I added a little duration today. I feel sentiment has gotten a little ahead of itself and any bad economic news will cause us to rally back toward 4.50%. Maybe we'll continue to get strong economic news from here, and my prediction of a 4.90% will come sooner than I thought, but I just don't think so.

2 comments:

EconUpdate said...

I am kind of a fixed income nerd myself and I am curious how many people frequent your blog? It is nice to know that other people are interested and know the vast sums of money in the fixed income side of the market.

Tom G. said...

150-200 hits on weekdays. Took about 3 months to get up to that level, and its been consistently in that range ever since. I have no idea how many subscribe through feeder sites, except that Bloglines shows 43 subsribers.