30-Year Treasury Bond Yield Suffers From High Volatility

So far this month, bonds have bounced up and down like a yo-yo.

Between last Monday and Wednesday, yields on the 30-Year Treasury Bond moved sharply higher, past 3.1%.

On news that Greece’s debt reckoning has been delayed until the end of the month, yields on the Treasury dropped, falling below 3.05%.

Then, after Friday’s jobs report, higher again. And today, yet another spike higher. See for yourself…

30 Year Treasury Bond Yield June 1-9 2015

The news out of Europe is that Greece has deferred payment until June 30.

Instead of paying €300 million last Friday, they’ve decided to bundle all of June’s four payments into a total of €1.6 billion due at the end of the month. I doubt they’ll be able to pay that heftier sum, so I think it’s safe to say the country has pretty much defaulted!

On the employment front, the Bureau of Labor Statistics (BLS) report beat expectations, making the odds of a rate hike more likely.

Non-farm payrolls increased by 280,000, when 220,000 was the expected figure. The participation rate increased to 62.9%, when it was expected to decrease to 62.7%. Finally, hourly earnings moved higher by 0.3%, 0.1% higher than expected. The only negative was the unemployment rate which increased to 5.5%, but even that was due to an increase in the participation rate.

With the Fed meeting beginning a week from today, I believe we’ll see continued volatility up until then. The likelihood of a rate hike is now higher given the positive wage growth and apparent stability in prices, seen in both producer and consumer prices last month.

I still believe a rate hike will happen sooner than later. Harry believes we won’t see a rate hike until much later in the year, if at all in 2015. Our shared opinion of the economy’s health does suggest the Fed can’t and even shouldn’t raise rates — I simply think they’ve backed themselves into a corner, and that at this point, they have no choice.

Time will tell.

Lance Gaitan

Lance Gaitan

Editor, Dent Digest Trader

How CEOs are Earning 335x MORE Than Their Own Employees

What if I told you up to 95% of companies currently trading on the stock market today are essentially stealing money right out of your pocket!? This includes some of the biggest names in the corporate world… companies that trade millions of shares a day, who you might be invested in right now!

Discover just how far the deceit on Wall Street goes and how you can still uncover many lucrative opportunities in the stock market today, in our new infographic: How CEOs are Earning 335x MORE Than Their Own Employees

LEARN MORE
Categories: Bonds

About Author

Lance Gaitan graduated from Franklin University in Columbus, OH with a degree in Finance. After graduating and working as an auditor for an insurance administrator as a number of years, he attained his securities license. He then went to work as a broker for a small firm and during the mid-1990’s Lance managed the futures trading desk for Piper Jaffray, a large regional brokerage firm based in Minneapolis. After migrating to Florida in early 2000, Lance founded a futures trading firm, GSV Futures, specializing in retail commodity trading strategies. Lance sold that business in 2006 and joined Harry Dent, Jr. and Rodney Johnson at Dent Research shortly thereafter.