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Japan to Purchase Bonds
01/11/2011
Japan plans to buy "more than 20 percent" of the bonds issued by Europe’s financial-aid funds amid concern that Portugal and Spain will ultimately need to be bailed out; the Euro is up against the yen; stocks are higher. The Treasury is scheduled to auction $32B of 3yr notes today, $21B of 10yr notes tomorrow, and $13B of 30yr bonds on Thursday. Right now, the futures market is pricing in an 86% chance that the Fed keeps rates between 0% and 0.25% through April 27th, 2011. Currently, the Ten Year yield is at 3.36% (3.31% yesterday) and the 2-10 yield spread is at 273bps, steepening 1bp since yesterday morning.
