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The Long-End of the Yield Curve Flattens PDF Print E-mail
Written by Eddy Elfenbein - Crossing Wall Street   
Wednesday, 23 April 2014 05:22

Here’s a look at the yield spread between the 5- and 30-year Treasuries. The gap between the two recently narrowed to 177 basis points which is a 4.5-year low.

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What’s happening is that the back end of the yield curve is starting to flatten. Bear in mind that it’s still quite steep. It’s merely not as steep as it used to be.

What does this flatter back end mean? It’s hard to say but I suspect there are two opposing forces at work. At one end, investors are realizing that the U.S. fiscal situation isn’t as dire as once believed. The CBO recently had the “good” news that this year’s deficit will be under half a trillion dollars (yay?). That’s huge but not as huge as it used to be. Also, yields in the middle part of the yield curve are starting to reflect the belief that interest rates will rise next year, and in 2016.

Here’s a look at the yield curve from five months ago and from yesterday. You can see where the red line is both higher and lower than the blue.

image1400

Historically, the best indicator for the economy has been the spread between the 2- and 10-year Treasuries. That’s still quite wide.

...also:

The Now-Forgotten Tech Stock Crash on “Earth Day” 1970

Posted by  on April 22nd, 2014 at 11:04 am

 
The Most Likely Future Scenario for the Fed PDF Print E-mail
Written by Arabian Money   
Tuesday, 22 April 2014 07:43

ec121111111111111122112111111111111151And why it is not the one everybody is expecting.

The consensus is usually wrong among financial analysts, so it is a fairly safe bet that the most likely future scenario for Federal Reserve policy will not be the one that everybody is expecting.

Right now Fed chair Dr. Yellen has us on course for a gradual wind-up of the QE money program by this autumn and a steady rise in interest rates as the US economy recovers up to full speed and only then will interest rates get back to their long-run averages. It’s a rosy scenario that has investors switching from bonds to equities to participate in the coming boom.

...continue reading HERE

 

 

 

 

 
Russia's bond market is Achilles Heel as showdown with West escalates PDF Print E-mail
Written by Ambrose Evans Pritchard via The Telegraph   
Monday, 21 April 2014 07:10

Country's private companies shut out of global bond markets, raising prospect that they may need state support

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Russia is at increasing risk of a full-blown financial crisis as the West tightens sanctions and Russian meddling in Ukraine pushes the region towards conflagration - continue reading HERE

 
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Greg Weldon
17 April 2014 ~ Michael Campbell's Commentary Service

We are pleased to introduce a new feature to the Inside Edge with the first of a regular contribution from Greg Weldon. Greg's video and...   Read more...

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