This will be an attempt to contextualize a view on Government Bonds by cutting and pasting copy from my favorite Finance blogs and Daily notes.
What a great learning experience today was to a young neophyte. The risk management process of hedging out the delta in equity exposures, and its importance came to light.
Here is Mr.White from Heisenberg Report noting the play by play from Bloomberg and the safe heaven bid into treasuries at day’s end.
As Bloomberg notes, “between 3pm-3:10pm ET, 266k TYH8 contracts traded in screens as 10Y yields reached 2.705% before rebounding to 2.75%, richer by 9bp on the day.”
“The turn in equities has now turned vicious enough that it has pulled U.S bond yields sharply lower, of which the yen has been the main beneficiary,” Deutsche Bank’s Alan Ruskin said, adding that “equities are so incredibly volatile – both the drop and immediate/current recovery – that tangential markets like FX are struggling to keep up.”
The following is from Mr. Thornton’s daily note via Hedge Fund Telemetry
Bond Bullish sentiment is now at 7% – deeply oversold.