Wednesday, August 12, 2009


Testing week for US bond investors
By Michael Mackenzie in New York
Published: August 10 2009 18:23 | Last updated: August 10 2009 18:23
Traders would not be surprised to see the benchmark test 4 per cent ahead of a $23bn auction on Wednesday.
The sale will be held about an hour before the Fed’s meeting finishes, which could result in lacklustre demand for the new notes.
David Ader, head of government bond strategy at CRT, said his research and trading house was “leaning” towards a bearish view of the Treasuries market with a test of 4 per cent yield level for the 10-year note.
“The trading environment is not very liquid, volumes are low and the risk appetite of dealers is also limited,” he said.
Traders face the auction of $37bn in three-year notes on Tuesday and $15bn of 30-year bonds complete this week’s debt sales on Thursday.