UST MORNING CALL: ‘Patience Over Month-End Should Pay Off’
(Bloomberg) -- “In the prior two refunding months, we noticed a pattern of rates rallying a day or two into the new month on a potential short squeeze. But history suggests rates should ultimately rise in the first five days after month-end,” BMO strategist Aaron Kohli says in note.
- “Should the short-squeeze pattern repeat this refunding month, wait for the buying to subside before entering shorts,” and “patience over month-end should pay off”
- Other observations from strategist morning notes:
- CRT (David Ader): “Overnight session was a bullish one for the Treasury market –- for reasons beyond the simple month- end influence as February comes to a close,” and primary motivators “were a couple Chinese developments, admittedly a familiar refrain given the relevance of the global economy in justifying negative yields in most major bond markets”
- Marty Mitchell (independent): “As is typically the case during a refunding month, the index extensions are greater than the norm now that the new (and longer) refunding issues are being included in those indices”
- “Bond market should also benefit from a bit of a risk off tone that has developed as investors lose confidence in the ability of global central banks to stimulate growth or inflation”
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Aaron Kohli (Bank of Montreal)
David Ader (CRT Capital Group LLC)
Marty Mitchell (The Mitchell Market Report LLC)
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