Bloomberg: Treasuries lagged behind stocks by the most in seven months on expectations the U.S. economy is growing enough to allow the Federal Reserve to end debt purchases this year.
U.S. government securities were little changed in February, based on the Bloomberg U.S. Treasury Bond Index. (BUSY) The MSCI All-Country World Index of shares gained 4.4 percent. It was the biggest difference since July. The Treasury Department is scheduled to sell $13 billion of two-year floating-rate debt and $35 billion of five-year fixed-rate notes today.
“The equity markets will rise because of the good shape of the U.S. economy,” said Hiroki Shimazu, the senior market economist in Tokyo at SMBC Nikko Securities Inc. The company is a unit of the nation’s second-biggest bank by market value. “The U.S. Treasury yield will also rise because of the good shape of the economy.”
Benchmark 10-year yields were little changed at 2.71 percent as of 1:08 p.m. Tokyo, Bloomberg Bond Trader data show. The price of the 2.75 percent note maturing in February 2024 was 100 10/32.
The yield will be 3.37 percent by year-end, based on a Bloomberg survey of economists, with the most recent forecasts given the heaviest weightings. The move would hand a 2.8 percent loss to an investor who buys today, data compiled by Bloomberg show.
The ten year rate will rise because ten year depreciated machines like trucks, lathes, and houses will be moving thru the economy. Is that true?
Housing starts, slightly up over the year.
NEW YORK, Jan 28 (Reuters) - U.S. Treasuries prices edged up on Tuesday after data showing an unexpected fall in orders for U.S. durable goods in December spurred safe-haven bids, but nervousness ahead of the Federal Reserve's policy decision capped gains.
The Commerce Department reported that orders for long-lasting U.S. manufactured goods fell by 4.3 percent in December.
"It does paint a much bleaker picture for the U.S.," said Aaron Kohli, interest rate strategist at BNP Paribas in New York.
Home purchase applications:
Home sales are slow, but that is not a lot of volatility, not a killer crash.
Otherwise, corporate profits conue up, but half of that up is outside of the US.
Conclusion: The private sector is a slowing a bit, but it is not going to crash. These economists will eat a bit of crow. The government in DC is due to crash sometime in the next two years, however. It is a regularly scheduled crash.
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