Bond Expert Wednesday Outlook

| About: SPDR Barclays (TLO)

Prices of Treasury coupon securities are posting very small changes or no changes at all in overseas trading. Shorter maturities have seen yields drift higher whilst longer maturities are dramatically unchanged.

The yield on the 2 year note has climbed a basis point to 0.93 percent. The yield on the 3 year note has climbed 2 basis points to 1.46 percent. The yield on the 5 year note has edged higher by a basis point to 2.31 percent. The yield on the 7 year note edged higher by a solitary basis point to 2.94 percent. The yield on the 10 year note is stationary at 3.34 percent and the same can be said of the yield on the Long Bond which is stuck at 4.17 percent.

The 2 year/10 year spread is a basis point flatter at 241 basis points.

The 10 year/30 year spread is unchanged at 83 basis points.

The 2 year/5 year/30 year spread has narrowed to 49 basis points.

The Open Market Desk will engage in the penultimate intervention today of the Quantitative Ease era. The Desk will purchase August 15 2026 paper through August 15 2039. As the sun sets on the QE era some commentators are busy seeking a new topic upon which they can pontificate and hyperventilate.

That purchase in concert with a supply announcement should tend to keep the belly of the Treasury curve and the front end under some pressure. I think that the Long Bond should be the relative value victor in the days ahead.

The Federal Reserve will release its latest Beige Book today. I doubt that there will much there that we have not heard previously and I do not expect that it will move the market.

I expect a quiet day today devoid of histrionics. I would look to sell the market if and when the 10 year trades in the 3 .20s.