Spain Spits in the Face of Treasury Bond Bears

Best of the Bond Market for April 10th, 2012

Article by Businessweek

Worries over Spain grow as bond yields rise - Our Take: Ultimately I want the US and Global economies to do well so we can all prosper.  With that being said I have to say that I am taking great pleasure in the rally in treasury bonds over the last few days.  To make s long story short, fear or what people are otherwise referring to as “risk off” is now back on the center stage, as the market rushes out of equities and other higher risk assets like Spanish and Italian bonds, and into the traditional safe haven, US Treasuries.  The yield on the 10 year note is now back below 2% for the first time since yields surged a month ago and everyone and their mother was declaring the start of a new bear market in treasuries.  Eventually the bond market bears will be right if for no other reason than most of them have been saying the same thing for years, and will continue to say the same thing until they are proven correct.

Link from @CateLong’s Muniland Snaps, Article by James Colby of Van Eck Global

High Level Municipal Bond Credit Outlook - Our Take: This pretty mich sums it up: “Currently, only a few states are on negative credit watch. Moody’s has nine states, but S&P has just two and Fitch five….. At the state level, we are far from the point where the word “default” belongs in intelligent discussion”.

Tweet, Chart, and Article by @allstarcharts

Junk Bonds Break Support  - Our Take: We are not chartists here at LearnBonds however what we find interesting for our readers about this is at the same time Treasury Bond Yields are falling Junk Bond Yields are rising.  The reason why is that Junk bonds tend to mirror stocks in a lot of ways because they are so much more risky than Treasury bonds.  Allstarchart’s chart of the junk bond market ETF the JNK reflects this as its price falls when yields on the junk bond market as a whole rise.  For more on why price moves inversely to yield go here.

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