In positive news, the negative basis continues it's torrid narrowing inside -100bps. This basis has slightly outperformed the rally in spreads due to the slightly shorter nature of the basket of cash bonds (versus the overall index).
This week we'll likely to see some healthy corporate and treasury supply. Realistically, we'll probably see more attention and press this week about the new iPhone.
One common reason behind a treasury rate back-up is convexity hedging. DeutscheBank maintains that this is not the reason behind this recent rise in yields but rather the old fashioned 'more sellers than buyers'. If convexity hedging is not a familiar term for you, learn about it here.
It was oddly comforting to see a rational and traditional handover of Tribune to senior debtholders without government intervention, union pressure and shenanigans or a new change of the rules.
Given the current populist administration, one should not be surprised that there is now some chatter about compensation reform for the entire financial services industry not just the TARP takers.
If it's any solace, Geithner is cannot sell his home either.
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