Thursday, September 20, 2012

Just bought the dip in 10yr notes

The treasury market is still random (with a bullish bias given we are approaching month-end), and the dip we just saw after the 10yr TIPS auction was from TIPS traders who found themselves needing to sell duration after they bought more bonds than expected in the auction.  This has happened before, and the result was the same...downtrade post auction for the next few hours.  The last time this happened in the same type of setup, the entire post auction downtrade was entirely reversed by the following morning.  I expect the same to happen this time as well.   I just bought 1 unit of 10yr notes @ 98-20+ (the equiv of buying ZN @ 132-13).  The ZN center of value is 132-22+...and i expect that level to reign in the market sometime before tomorrow morning.  That should put 10yr notes around 99-00.  If there is another leg to the downtrade, then i would expect to buy another unit of 10yr notes around 98-15...still confident for the downtrade to reverse by the following morning.

No comments:

Post a Comment