Monday – June 29th, 2009

Supply vs demand dynamics appear to be at work once again and we’re NOT in the mood to fight it. Not yet anyways. For now we’re gonna do more reading and thinking than trading. The WSJ does point out there are some signs of hope in the UK econ. Last WE checked, though, HOPE wasn’t a solid strategy and furthermore, if you read the article, it talks about biz optimism which is tempered at best. NOT yer overwhelming sign of looming prosperity but heck, it’s Monday, right? We’re trying to be in a reasonably good mood, so we’ll go WITH the headline! IF we wanted to get all bummed out about the state of things, we’d turn to NYTimes article that just oozes of frustration – ‘A Plan to Stem Foreclosures, Buried in a Paper Avalanche’. We are gonna continue to think that until housing is worked OUT, the overall economy is gonna be far from ‘V’ like, despite what some of the talking heads out there are telling us. In as far as what the experts are saying – the StreetStuff has a decent mix of bulls and bears with a slight lean towards being more economically positive. Technicals are on the light side today (early Hamptons Hedge?) and JPM hangs on to some longs AND just recently got short 2s. OUR thoughts and game plan for the week is laid out on the PDF and it’s very brief. Have a great start. Regards, Saul/Steve

 

Here’s an excerpt of what you’ll find on our PFD:

 

At the risk of OVER simplifying things as we start this holiday shortened week, we have NO problem thinking about the market in a bullish way right up until/through tomorrow afternoon’s month-and-quarter-end that features index extensions at the same time we have a very large and known buyer – The Fed – in buying. As we get closer to the NFP – THURSDAY this week, not Friday, we’re thinking about it in terms of being widely expected to be much less crappy – Citi thinking less than -300k – AND we’re thinking about the Treasury market in terms of ‘The Hamptons Hedge’ where folks look to get OUT before the next guy does and get FLAT into the long weekend.

 

All of this in mind, we’re simply unconvinced one way or another, in terms of the handful of trades WE happen to like at any given moment. IF and when one were to be kind enough to present itself as being at an extreme worthy of trading or counter-trading, believe us when we say we’re gonna be thrilled to have something to mention to you.

 

At the moment, here’s where OUR needle is stuck … so we’ll NOT try and labor the point, we’ll just offer a look at the 2s/10s and move on with our lives:

2s10s3

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