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Fri, Sep. 5, 4:47 AM
- U.S. data released today is expected to show steady job growth, rising in August to 225K from 209K in July, and a slight drop in the unemployment rate to 6.1% from 6.2%.
- Adding to the ECB's move for a new securities purchase program and cutting its key rates, highlighting an improved labor market will spur debate as to whether the Fed will step back from its commitment to keep rates low for a "considerable period" or hang on to its current policy due to a weak global economy.
- ETFs: TBT, TLT, UUP, TMV, UDN, SHY, IEF, TBF, EDV, PST, TMF, TTT, ZROZ, SBND, TLH, IEI, TYO, DLBS, DTYS, FORX, VGLT, UDNT, BIL, UUPT, UST, UBT, STPP, SHV, VGIT, PLW, VGSH, TLO, GOVT, FLAT, TBX, SCHO, USDU, GSY, SCHR, TENZ, DTYL, TYD, ITE, LBND, DTUS, SST, TYBS, DTUL, DLBL, TUZ, TBZ, FIVZ, DFVL, DFVS, TYNS, USFR, TFLO, TAPR
Wed, Aug. 20, 2:15 PM
- The 10-year Treasury yield adds another basis point following the FOMC minutes, now ahead 2.5% bps on the session to 2.43%. Looking at a rate more sensitive to Fed policy, the 5-year note yield jumps 4.5 bps to 1.625%.
- The minutes show many committee members believing the labor market is improving faster than anticipated across a whole range of indicators, and the time is getting near for when it can no longer be described as underutilized.
- TLT -0.4%, TBT +0.8%
- ETFs: TBT, TLT, TMV, SHY, IEF, TBF, EDV, PST, TMF, TTT, ZROZ, SBND, TLH, IEI, DTYS, DLBS, TYO, VGLT, BIL, UST, STPP, UBT, PLW, SHV, VGIT, TLO, GOVT, FLAT, VGSH, TBX, SCHO, GSY, TENZ, SCHR, DTYL, LBND, ITE, TYD, DTUS, TYBS, SST, TUZ, DTUL, DLBL, TBZ, FIVZ, DFVL, DFVS, TYNS, TAPR
Wed, Jul. 30, 4:31 AM
- The Fed is likely to go forward with its plan to wind down its bond-buying stimulus today, cutting its monthly asset purchases to $25B from $35B - on target for shutting the program this fall.
- During the Fed's announcement, investors will be looking for clues to how much closer the central bank is to raising interest rates, which can be triggered by the recent unemployment drop or firm inflation.
- A report is also expected to show the U.S. economy growing at a healthy 3% annual clip in Q2.
- ETFs: TBT, TLT, TMV, SHY, IEF, TBF, PST, EDV, TMF, TTT, ZROZ, SBND, TLH, IEI, DTYS, TYO, DLBS, VGLT, BIL, STPP, UST, UBT, PLW, VGIT, SHV, TLO, VGSH, TBX, GOVT, FLAT, SCHO, GSY, TENZ, SCHR, DTYL, ITE, LBND, TYD, SST, TYBS, TUZ, DTUL, DTUS, DLBL, TBZ, FIVZ, DFVL, DFVS, USFR, TYNS, TFLO, TAPR
Tue, Jul. 15, 12:46 PM
- The Barclays Inverse U.S. Treasury Aggregate ETN (Pending:TAPR) will track the returns from short positions in 2-year, 5-year, 10-year, long-bond and ultra-long U.S. Treasure futures contracts.
- "TAPR expands and complements our existing range of fixed income ETNs, and offers investors a differentiated strategy to hedge against or benefit from rising U.S. dollar interest rates," said Ian Merrill, Head of ETNs Americas. "TAPR is also the first Barclays-issued ETN to be listed on NASDAQ."
- Other Barclays treasury ETNs: STPP, FLAT, DTYS, DLBS, DTUS, DFVS, DTYL, DTUL, DLBL, DFVL
Fri, Jun. 13, 7:54 AM
- Short Sterling futures have priced in a 25 basis point hike in British interest rates before year-end following Mark Carney's suggestion yesterday that a rate boost could come sooner than markets expect. The market has also priced in 25 basis point boosts for each quarter of 2015.
- Looking at U.S. rates, the long-end of the Treasury curve didn't react to Carney's unexpected hawkishness, but the short end is a different story, with the 3-year Treasury yield up 5.5 basis points to 0.952%, the highest since May 2011. Looking at Eurodollar futures, the timing of the Fed's first hike was nudged forward a bit to about April of next year.
- ETFs: SHY, IEF, PST, IEI, TYO, DTYS, BIL, STPP, UST, SHV, TBX, VGIT, FLAT, VGSH, SCHO, GSY, ITE, DTYL, SCHR, TYD, SST, TUZ, DTUL, DTUS, TBZ, FIVZ, DFVL, DFVS, TYNS
- The pound (FXB) continues to gain, +0.3% today to $1.6954. In their first reaction to Carney's speech, equity investors sell, with the FTSE 100 -1.1%.
- ETFs: FXB, EWU, GBB, EWUS, FKU, DXPS, DBUK
- Previously: Sterling spikes on hawkish Carney comments
Dec. 18, 2013, 2:22 PM
- "The Committee sees the improvement in economic activity and labor market conditions ... as consistent with growing underlying strength in the broader economy," the FOMC says, adding that the decision to scale back QE by $10B per month is based on "the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions."
- Although the Committee says it will "likely reduce the pace of asset purchases in further measured steps [should] incoming information support [the] ongoing improvement in labor market conditions and inflation moving back toward [the] longer-run objective," the Fed notes that asset purchases are "not on a set course."
- FOMC also says it "anticipates .. that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6.5%."
- Updated FOMC projections: 2014 PCE inflation now seen at 1.4-1.6% (from 1.3-1.8% in September); 2014 GDP now seen at 2.8-3.2% (from 2.9-3.1% in September); 2014 unemployment rate now seen at 6.3-6.6% (from 6.4-6.8% in September). Full release
- 10-year yield is at 2.91% versus 2.87% just prior to the announcement.
- Dow (DIA +0.9%), S&P (SPY +0.6%), and Nasdaq (QQQ) all staged brief rallies on the news but have since retraced a bit. Gold (GLD +0.3%) fell sharply initially but recovered.
- ETFs: TBT, TLT, TIP, TMV, SHY, IEF, TBF, PST, EDV, TTT, TMF, VTIP, TLH, IPE, ZROZ, SBND, IEI, SCHP, DLBS, TYO, LTPZ, DTYS, STPZ, STPP, VGLT, TIPZ, UST, BIL, SHV, STIP, PLW, GOVT, FLAT, UBT, TBX, TLO, VGSH, VGIT, RINF, GSY, DTYL, LBND, SCHR, SCHO, TYD, ITE, TYBS, TPS, TRSY, TENZ, DTUL, TDTT, TUZ, SST, INFL, DTUS, FIVZ, TBZ, DFVL, FINF, UINF, DLBL, DEFL, DFVS, TIPX, TDTF, TYNS, SINF
Sep. 12, 2013, 2:55 PM
- Just another 110 basis points to go. The spread between the 10-year Treasury yield and the target Fed Funds rate has never exceeded 400 basis points, according to SocGen. Never.
- If the FOMC keeps Fed Funds at about 0% until at least the end of 2015 (as it's promised), this would seemingly cap the 10-year yield (currently 2.9%) at 4% for the next 2-plus years. Alas, the Dec 2015 Eurodollar contract at 98.31 is pricing in about 125-150 basis points in Fed rate hikes by then. Somewhere, there's an opportunity in all of this.
- Long-maturity Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX
- Yield curve ETFs: STPP, FLAT.
Aug. 6, 2013, 11:56 AM
- The meme that the 1994 bond market (AGG, BND) selloff won't happen again takes a blow as FRBNY researchers take a look and find this year's decline thus far is tracking 1994's carnage (and 2003's) fairly closely.
- Where the moves differ is in the shape of the yield curve. 1994's rise in long-term yields was accompanied by higher short-term rates (as investors anticipated Fed rate hikes), leading to little-change in the yield curve. In 2013, there's been very little movement at the short-end, meaning investors are simply demanding more yield to hold longer-dated paper.
- Popular Treasury ETFs: TLT, TBT.
- Yield curve ETFs: STPP, FLAT.
- Treasury bull Bill Gross (BOND) is beginning to sound maybe just the slightest bit desperate, tweeting minutes ago: "JOLTS data do NOT validate 200K payroll prints. More like 125K. Taper may be delayed if Yellen has a big vote."
- Today's Jobs Openings and Labor Turnover Survey (JOLTS) is here.
Sep. 11, 2012, 10:32 AM
Aug. 9, 2012, 11:15 AMThe yield curve continues to steepen, the 10-year Treasury up another 3 bps to 1.72% (the highest in 2 months). A steeper curve is consistent with a growing economy, writes Vince Cignarella, but does it mean the Fed - hard at work trying to suppress long yields through The Twist - is becoming irrelevant? | 3 Comments
May. 17, 2012, 2:56 PMThe move into Treasurys has left the yield curve at its flattest level since the end of 2008, with 30-year - off 8 bps to 2.82% - yielding only 273 bps more than the 90-day T-bill. At 1.71%, the 10-year is approaching its lowest yield ever. As in 2011 among the world's most hated asset classes, Treasurys in 2012 are close to overtaking stocks yet again. | 3 Comments
May. 15, 2012, 11:02 AM"Treasurys are still cheap," says BMO's Scott Graham, but suggests we're near the point where central banks may begin to take action to stem jitters in financial markets. Such a move could send yields higher at the long end, but leave the short end untouched. He's buying 2-year paper and selling 10's - the steepener trade (STPP), which has had a rough 2012. | Comment!
Apr. 17, 2012, 12:48 PM
Mar. 9, 2012, 8:47 AMTreasury prices head south following the solid NFP report, Thirty-year bond futures diving more than half a point. Moving in the other direction is the yield, +4 basis points to 3.22%. On the short end, September 2014 Eurodollar futures budge 3.5 basis points lower, pricing in a slightly greater chance of future Fed rate hikes. | 1 Comment
Feb. 29, 2012, 5:07 PMWe are no longer in a crisis, so we should step away from crisis thinking, Philadelphia Fed chief Plosser tells CNBC, going on to say a rate hike could be coming in 2012. The similarities between 2011 and 2012 continue to grow. It was about this time last year Fed hawks were floating 2011 hikes ... just as the economy was set to roll over. | 4 Comments
Dec. 13, 2011, 3:03 PMWill ultra-low rates extend beyond mid-2013? A quick check on trading on Fed Funds futures contracts reveals that traders aren't pricing in much of an increase for interest rates even after the Fed's rate-lock expires. Implied yields for the Fed Funds rate: July 2013 0.18%, December 2013 0.30%, July 2014 0.65%. | Comment!
FLAT vs. ETF Alternatives
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