U.S. Treasury bonds are rising again , and the yield on 10 – year bonds is reduced. At yesterday’s auction yield reaches a minimum level of 2.4 %.
Experts can not agree on the reasons associated with the growth of bonds. Nevertheless, there are at least five factors that can influence the dynamics of the market, said Peter Chir of Brean Capital.
ECB
June 5 will be a meeting of the Board of Directors of the ECB , which can be reduced by the interest rate and deposit rate .
So bond buyers are now willing to pay close attention to the prospects of quantitative easing.
The popularity of short-term bonds
” This market is all hate , and everyone loves to hate him . Once yields are rising , always on TV or in print appear darkest forecasts for Treasury yields ,” – says Chir .
Long-term Treasury bonds are now not popular with traders. In this short-term bonds, or selling directly to hedge risks in other asset classes , has recently enjoyed a big enough demand.
” Underperform “
Over time, many investors are faced with a duration below the market , and this situation will be corrected over time .
liquidity
According Chira , there is a good chance in the performance of operations on the long-term treasury bonds , that a similar operation on the same parameters will need someone else.
growth rate
Concerns about the slowdown in the U.S. economy is becoming more pronounced . In I quarter GDP fell by 1 %, which is significantly worse than the 0.5% decline that economists predicted .
Drop was the first since January – March 2011 , but economists say the fall is temporary and does not reflect the real situation.
