UST MORNING CALL: Quarter-End Flows Will Extend ‘Well Into 2Q’
(Bloomberg) -- “Even though today concludes the quarter, residuals are going to extend well into Q2,” and “the #1 carryover will be cautious profit-taking when risk assets begin to do more than recover from the sharp losses in January and early February,” FTN strategist Jim Vogel says in note.
- “Holding above old lows is an achievement -- see oil in particular -- but global indicators don’t warrant advancement much beyond the support from lower interest rates and credit spreads”
- Other observations from strategist morning notes:
- BMO (Aaron Kohli): “The fact that month-end comes just before NFP is likely to keep the market cautious about moving too far in either direction”
- CRT (David Ader): “There has been a bit of data out although nothing substantial enough to explain any market activity let alone a flattening bid to Treasuries,” and “none of the comments from contacts overseas mentioned the most obvious thing which is simply month- and quarter-end buying”
- Marty Mitchell (independent): “Month-end and quarter-end should support the bond market again today,” and “after the large equity gains during the month, don’t be surprised to see asset allocation flows out of stocks into the bond market today”
- RBS (John Briggs): “Daily momentum is showing signs of being extended,” and “I worry that as the market overall rallies, there will be a move to extend as successive parts of the US Treasury curve provide less and less yield, and investors shift out in duration in order to obtain any return”
- Seaport Global (Tom di Galoma): “Continue to favor buying dips due to favorable month-end duration adjustments and would enter the 5/30yr flattener at 138bps which is the 200- DMA”
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Aaron Kohli (Bank of Montreal)
David Ader (CRT Capital Group LLC)
Jim Vogel (Ftn Financial)
John Briggs (RBS Securities Inc)
Marty Mitchell (The Mitchell Market Report LLC)
Topics UST Morning Call
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