Long-term rates have continued in a narrow band, but in very odd behavior have trended ever-so-slightly down. The 10-year T-note today trades at 1.70 percent, the lowest since the April 7 top at 1.93 percent, and lowest-fee mortgages are sliding under 3.75 percent. Why odd? This slide began two weeks ago, all through the week prior to release of April payrolls. Nobody trades that way, buying bonds and MBS (mortgage-backed securities) ahead -- the payroll data will kill you, often arriving way off forecasts. And the gentle slide continued this week, in which the Treasury sold at auction $62 billion in new bonds, more than half 10-year maturity or longer -- never buy bonds in advance of a Treasury dump. Stick with simple. No need to put beer cans on the rabbit ears to improve reception. German and Japanese 10-year bonds compete for buyers with ours, and in the same two-week span, their yields have declined also, pulling down our yields. German 10s have slid from 0.30 percent to ...
- In very odd behavior, long-term rates have continued in a narrow band, trending ever-so-slightly down.
- This slide began two weeks ago, all through the week prior to release of April payrolls. Nobody trades that way.
- So we wait to see how the world responds to Fed tightening into a world in which every other central bank is in full-scale stimulus panic.