The fact that Treasury's 2010 borrowing will be challenging, as rates are set up and banks become saturated with bonds, has been repeatedly stated by not only your friendly neighborhood economist but many other economists with a sense as well. It seems that markets woke up after a supposedly tense primary dealers meeting, which the Treasury denied- incidentally I find the Treasury and my beloved Besiktas similar in the sense that they both like to use their web sites to deny media rumors with Soviet-era one pagers that end with "we present this to the attention of the public"- "kamuoyunun dikkatine sunulur" id you speak Turkish.
Anyway, the bond traders I spoke to told me that locals do not want to take maturity risk at such low carry. Besides, there has been some foreigner sale as well. In any case, the latest Inflation Report also suggests that we have come more or less to the end of the easing cycle barring unexpected events.
On the positive side, the traders I talked to do not believe IMF is priced at all, pointing out that the recent decrease in reserve requirements supports this view. This means that, if there is a deal, bonds are sure to react strongly, not only because such a deal would affect the debt calculus profoundly, but also because it'd come as an unexpected shock...
Anyway, the bond traders I spoke to told me that locals do not want to take maturity risk at such low carry. Besides, there has been some foreigner sale as well. In any case, the latest Inflation Report also suggests that we have come more or less to the end of the easing cycle barring unexpected events.
On the positive side, the traders I talked to do not believe IMF is priced at all, pointing out that the recent decrease in reserve requirements supports this view. This means that, if there is a deal, bonds are sure to react strongly, not only because such a deal would affect the debt calculus profoundly, but also because it'd come as an unexpected shock...
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