Monday, July 16, 2007

Treasurys are poised to extend turbulent ride

--the wild ride in the U.S Treasury market is set to continued this week, with investors torn between worrying about strong growth and higher inflation and fretting about subprime-mortgage woes. --Drivers of Treasury Montary policy: --Some LT investors are keen on Treasurys because they are betting the U.S. economy will eventually slow, forcing the Fed to cut rates Supply: --Some cite less supply: with the governments' deficit outlook improving, issuance could slow, making U.S. government bonds more attractive. Technical: flight to quality --As the subprime story stay upfront and center in the headlines, we whould continue to see highe daily volatitlity.

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