US Bond Market Cash Buyers
Market well bid today
Just wanted to share a couple of insights here. Since the new auctions last week the US Bond market has been well bid. The Basis has been super strong relative to the yield curve and we wanted to share a couple of insights. First off the term “Basis” is the differential between the US Govt Cash instrument vs US financial fixed income futures, i.e. US Govt 30Y vs US Bond Future, US Govt 10Y vs US Ten Year Note Future.
We have followed, traded and created our own program for these instruments and its what we have done for over 2 decades. The strength really started with the stellar 3+ basis point stop thru at last weeks 30Y auction and the strength of the basis continues today led primarily by the US Govt 10Y which is down -7.8bp on the day:
