When global financial markets are convulsing with uncertainty and anticipation, where can you find a safe, liquid place to park your money?
One of the best, and most frequently repeated answers to that question today was: US Treasuries. 5yr Notes were the biggest winner, but 10yr Notes weren't far behind, rallying nearly 15bps . As is normally the case during massive flights-to-safety, MBS lagged the move in Treasuries, but nonetheless were dragged up to their best closing levels in more than 20 months (Fannie 3.0s at 103-10!).
Today's volatility was kicked off by a completely unexpected and intensely interesting move on the part of the Swiss National Bank. Almost any google-able article can tell you all about it. Here's one with some additional color from market participants: Swiss central-bank shocker: It’s a ‘tsunami’; it’s a ‘bombshell
As it happened, this was really the only meaningful event of the day for bond markets. It caused such a massive amount of uncertainty and volatility that US Treasuries became one of the only no-brainer locations to stash cash until the volatility was sorted out. Simply put, Treasuries didn't even have to try today.
A lot of the volatility has to do with the implications about next week's ECB Announcement. After tomorrow, it's a 3 day weekend and then only 2 trading days before that announcement.
103-09 : +0-20
105-17 : +0-12
106-30 : +0-05
0.4200 : -0.0810
1.7280 : -0.1270
2.3670 : -0.0990
|Pricing as of 1/15/15 5:20PMEST|