The latest Bubble was in the Bonds Market,and it will come to an end with lots of pain and volatility
in the financial markets.After the FOMC meeting,Mr Bernanke hinted, that if the economy continues to get better, the Federal Reserve will start to tap its bond purchases program . This statement heralded the end of easy money by the Fed, and it roiled financial markets on Wednesday, continued yesterday and today was a volatile session with mixed results.
The peril is not that the easy money is going to end smoothly according to the Federal Reserve schedule. Institutional investors are not going to wait, they will make their decisions in terms of risk and reward as always. How much will they gain keeping bond investments(not much), towards how less risk they take by selling bonds,avoiding price losses and increasing yields, in a new scenario of increasing interest rates.
Today is a Triple Witching day when stock market indexes,stock market index options,stock
options expire on the same day,which are days with greater volatility. And it has been a unstable
day for markets in the US, although indexes closed with mixed results,with DJIA at 14,779.40 0.28% higher,Nasdaq at 3,357.25 0.22% lower, and S&P 500 at 1592.43 higher 0.27%.
Prices of US bonds closed lower, US$ 10 year Bond Price changed -31/32 with a 2.54 yield, and the 30 year Bond Price changed 16/32 with a yield of 3.589%
And has continued to pressure to the downside the bonds prices of emerging markets and developing
countries,and the depreciation of their local currencies.
in the financial markets.After the FOMC meeting,Mr Bernanke hinted, that if the economy continues to get better, the Federal Reserve will start to tap its bond purchases program . This statement heralded the end of easy money by the Fed, and it roiled financial markets on Wednesday, continued yesterday and today was a volatile session with mixed results.
The peril is not that the easy money is going to end smoothly according to the Federal Reserve schedule. Institutional investors are not going to wait, they will make their decisions in terms of risk and reward as always. How much will they gain keeping bond investments(not much), towards how less risk they take by selling bonds,avoiding price losses and increasing yields, in a new scenario of increasing interest rates.
Today is a Triple Witching day when stock market indexes,stock market index options,stock
options expire on the same day,which are days with greater volatility. And it has been a unstable
day for markets in the US, although indexes closed with mixed results,with DJIA at 14,779.40 0.28% higher,Nasdaq at 3,357.25 0.22% lower, and S&P 500 at 1592.43 higher 0.27%.
Prices of US bonds closed lower, US$ 10 year Bond Price changed -31/32 with a 2.54 yield, and the 30 year Bond Price changed 16/32 with a yield of 3.589%
And has continued to pressure to the downside the bonds prices of emerging markets and developing
countries,and the depreciation of their local currencies.
