US TSYS: USTs are trading little change ahead of the NYC open Monday, unable to hold the best of the early gains seen into the London open. Prices found a bid through early Tokyo trade, with dip-buying from Japanese names after the post-jobs sell-off on Friday. Volume was good and yields fell to session lows in early London trade, again led by the belly of the curve. Light profit-taking after some mildly hawkish comments from Fed's Plosser, speaking in Paris. The yield on the benchmark 2Y was last at 0.375%, with the 5Y at 1.635%, the 10Y at 2.785% and the Bond at 3.72%. The curve was unchanged to modestly flatter, with both 2/10s and 2/30s 0.5 bps flatter at 241 bps and 334.5 bps respectively. Cross-border trade saw the benchmark 10-yr US/German spread trading at 117 bps
US TSYS: USTs trade to session highs in early London trade, with the 10-yr yield now having clawed back over half of the losses seen in the wake of Friday's jobs data. Overall volumes have been solid through the Asian session, with the belly of the curve leading the way higher. The 2Y was last trading at 0.365%, with 10s at 2.765%. The 2/30s spread was last at 334 bps, 1 bps flatter.
US TSYS: After the big losses in US Treasuries Friday, Asian trading on Monday has seen a portion of those taken back, with the market trading on solid volume. Asian equity weakness after the Chinese trade data on the weekend has been part of the catalyst, but the week-long drive in the 10yr yield from 2.60% to 2.815% on Friday had the market oversold and prone to a bounce, as evidenced straight after the lows were made post-data on Friday. The 10yr yield sits 1.5bps lower today at 2.773% and futures 4/32nds higher at 123-21+. Futures have seen a solid 48,000 10yrs and 22,000 5yrs, although the short end is relatively quiet with the 2yr yield down 0.4bps at 0.365%, with the red month eurodollar strip seeing very solid bids at +0.5/1.0 on the day.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss
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