Massive buying of treasury bonds

Matein Khalid

Massive buying of Treasury bonds since last evening when we hit 3.18% yield on the UST 10.

UST 10 yield fell to 3.00% in Asia, 2.97% in London and is now only 2.94% in New York. This is a very unusual move in a 24 hour period. I think some major financial institution is in trouble and fear is making big money move cash into credit risk free assets like UST 10.

There is no way that inflation expectations have gone down so much though I noticed that breakeven rates in the US Treasury Inflation Protected securities (TIPS) market are off their peak and not rising. Normally the fall in the Nasdaq was blamed on rising interest rates but interest rates have sunk dramatically in the last 24 hours but Nasdaq is flat. So what is going on? Could there be a geopolitical reason for this scramble to buy US dollar and UST debt?

The US dollar is still very strong at almost 104. Does somebody have insider knowledge of the US CPI number due to be released tomorrow? Stranger things have happened in life and the financial markets. Who has been buying unusual put options on a gigantic scale on some big cap tech stocks? Is it time to buy stocks now for a tactical move higher? Remember that bear markets mean violent moves in both directions and it may be too late to get bearish now. Am I right or am I wrong?

Matein Khalid is Strategic Advisor with Asas Capital

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