The Long Bond Contract Turns 43!

On this, the birthday OF the 30-year Treasury Long Bond contract (CMEGroup here), I hope you’ll find the visuals of THE bond bull market of interest. They say, in price there is truth.

30-year Treasury Bond Futures
(click to enlarge)

Keep in mind, this is the very same bond bull market which everyone is constantly quick to dismiss as THE only bubble in all of financial markets.

I hope you’ll take a moment and celebrate today the trend, which has been and remains, your friend. As price has moved higher, bond YIELDS — the inverse of price — have moved significantly lower over time. So today as we celebrate the birth of a futures contract, lets consider and appreciate the very same trend in longer-term YIELDS:

30yr Treasury Yields
(click to enlarge)

Not only have lower yields helped finance plenty of R&D, plant and equipment spending, college educations as well as equity market moves (near and far). They have also helped finance corporate buybacks and more. Perhaps these high prices and low yields even helped YOU buy a home or two, along the way. They should be celebrated, not written off as a bubble.

There are plenty of reasons to continue fighting the trend but we wouldn’t. We prefer to embrace it and appreciate the long strange trip it has been and will more than likely continue to be. Our weekend note/thoughts detailed several reasons why this trend may continue. We highlighted the supply vs demand dynamic, World Trade Organization data and stagflationary impacts, shipping and freight and finally, the US employment situation — BLS recently offered it’s annual benchmark revisions and the data was NOT what you might think…

Contact us for more on where we believe rates are headed next, WHY, and what implications may be for your specific situation.

Stay safe

Steven J. Feiss

Managing Director, Fixed Income

Etico Partners, LLC

1795 Rout 9 Clifton Park, NY 12065

Office: (732) 683-9222
Mobile: (914) 450-9668

Meet the Author

Financial markets veteran with more than three decades of experience working with high profile, domestic and international asset managers and trading desks, producing customized and actionable solutions for strategic alpha generation and risk mitigation. Author of a unique daily (6x per week) cross-asset macro market commentary (the BondBeat) to inform and assist INSTITUTIONAL FIXED INCOME investors and trading desks.