Thursday, September 18, 2008
Credit Call: Short 30y Treasury
The 30 Treasury was trading at 4.08 as of 09/17/2008 end of closing. It is almost 10 year low. I believe flight to quality and market sentiment rushed investors to Treasury. The low yield is not sustainable and we suggest shorting 30y Treasury for 3 month. I believe the yield will widen by at least 20 bps within 3 month.