ProShares Ultra 7-10 Year Treasury
Why the Fed’s policy remains the key driver for US Treasuries
On August 15, yields on ten-year notes (IEF) and 30-year bonds (TBT) both fell by ten basis points to 2.34% and 3.13%, respectively. This was also their lowest level in over a year.
Why Gold ETFs See Robust Net Inflows against Actively Managed Gold Funds
One of the dominant financial trends of the past decade has been a move by investors out of actively managed funds and into passively managed index funds or exchange traded funds (ETFs).
Why economic indicators point to broad-based growth
Last week, U.S. economic data covered a number of sectors, including housing, employment, manufacturing, and inflation. All three housing indicators released last week were positive, and initial jobless claims once again beat market expectations. The CPI for September came in at an annualized rate of ~1.7%, the fourth straight monthly decline.
Must-know: What a steepening Treasury yield curve signals
Last week, the demand for U.S. Treasuries rose primarily on heightened global risks. Fears of a recession in Germany and Europe sent ten-year German government bond yields tumbling to 0.74% last week, their lowest ever.
Must-know: Risks associated with a premature liftoff in rates
When the Fed’s inflation and employment targets aren’t reached in a certain amount of time, it impacts the normalization rate. If the Fed overestimates the labor market recovery, a slower normalization pace is needed.
Must-know: Macroeconomic factors influence US Treasuries
Economic data is one of the most important Treasury yield drivers. Disappointing data usually results in falling yields. During a downturn, investors prefer safer assets like U.S. Treasuries (TLT) (IEF) (UST) and investment-grade bonds. This usually increases their prices. It causes yields to fall.
Why Treasury auctions impact investors and financial markets
The purpose of Treasury auctions is to obtain financing from markets at the most competitive cost. The yield on these securities is determined through a public auction process. These yields affect the secondary market for U.S. Treasuries. Yields and bond prices move in opposite directions.
Why the 5-year TIPS auction saw lower investor demand
The U.S. Treasury auctioned five-year TIPS worth $16 billion on August 21—lower than the $18 billion auctioned in April. Despite lower issuance, demand for the securities was lower at 2.48x—compared to 2.70x for the April auction.
Why US Treasuries saw pendulum shifts after the Fed’s FOMC
The biggest move in yields came last Wednesday, with the release of the 2Q14 GDP data and the press statement from the Fed’s July FOMC meeting—GDP grew 4% quarter-over-quarter (or QoQ) at a seasonally-adjusted annual rate in 2Q14,
Low Yields: The Reason Lies outside the United States
The reason for low yields lies outside the United States. Global yields have been heading south over the last ten years.
10-year Treasury note auction garners strong demand
Market demand for the ten-year note was strong in December—the highest since March 2013. This was primarily due to higher indirect bids.
Will the Treasury yield curve flatten or steepen?
US GDP growth has averaged ~2.5% from 1994 to 2014 in Q3. GDP growth is expected to range between 2.0% and 2.2% in 2014 and between 2.6% and 3.0% in 2015.
Barbell bond strategies explained: Benefits from longer tenors
There’s an obvious benefit to investing in long-term tenors. Long-term (IEF)(VCLT) maturities typically yield more than shorter-term (SHY) maturities.
Differences between the June and July FOMC statements
In general, the FOMC statement at the end of the July meeting implied that the Fed was more upbeat on achieving its twin targets of full employment in the labor market and inflation at around the 2% long-term level.
Why the 52-week Treasury bill auctions see lower market demand
The U.S. Treasury auctioned one-year T-bills worth $25 billion on July 22—the same amount as in the previous week—demand for the bills was higher though, at 4.27x, compared to 4.05x for the auction held the previous month on June 24.