Friday, 30 September 2011

1:01 (Dow Jones) The outperformance of the 30-year Treasury bond even turns the benchmark 10-year note into a relative laggard despite the latter's deeper liquidity. The extra yield investors demand to own 30s rather than 10s is 1.019 percentage points, the narrowest spread since July 2010 . It was 1.262 the day before the unveiling of Operation Twist last week. Some investors say the planned Fed buying will keep the 30-year yield falling in coming months, making the trade of buying 30s and selling 10s attractive. Some traders expect the yield gap to drop to as low as 0.75 point the next couple of months. (min.zeng@ dowjones.com)

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