Intraday Market Thoughts

Archived IMT (2009.03.26)

by Ashraf Laidi
Mar 26, 2009 16:35

China's worries with escalating US debt are not just limited to the dollar but also with the falling value of the US treasuries, as seen in the 30-40% rise in the yield of 3, 5 and 10-year Treasuries year to date. USD outlook remains especially shaky by the fact that despite the Feds purchasing $300 billion in LT Treasuries, a 1/3 of that was sold this week alone. Thus, downward impact on yield may not be prolonged. In fact, Last weeks over 2/3rds of last weeks 40-50-bp plunge in bond yields has been reversed. The bond-dollar impact remains a double whammy for the fate of +$700 billion of Chinas US Treasuries. Chinas concerns may not consist a threat to sell, but are sufficient for maintain dollar-aversion in global currency markets.


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