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What's Boosting Treasuries?

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  • Description

    UBS Head of U.S. Interest Rate strategy Chris Ahrens weighs in on the state of the treasury market.

  • Duration 2:56
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Much and here we are the middle of August our next guest is saying that we should be thankful for one thing at this time of year.

The Europeans are on vacation Chris Ahrens is the head of US interest rates strategy.

Some -- the very -- -- rude attitude -- to be taking but I assume you you need something about the markets.

Indeed well you know with the -- on vacation Karl we're not getting battered by a bunch of headlines.

You know about what possibly might be occurring -- him you know in the near future.

Let's take a look at I'd let's take a look at some market specifically today because of one I think the key question over have a ten year note for example.

And to show where its job to yield -- I think the key question that a lot of people wanna know is had interest rates.

Bottomed out just a few weeks ago we are so here we are -- -- half percent on a ten year now we've moved way off of that one point eight or whatever it is today and have we reached one point 81 -- just -- have we reached a bottom do you think generally speaking for interest rates.

Right well that's a good question certainly everyone's asking that because of the you know of the -- -- the impact it could have on their ability to refinance at lower rates yes and we traded at one -- 38 and one.

38 in the last week of July after that we had.

You know ECB's draw -- announcing potential bond buying program we're still awaiting the details of appetite on people's nerves.

We had a better than expected payroll number we better retail sales this week so the market has responded by trading back you know to higher yields.

Last night we ticked at the 200 day moving average of 186 so.

You know what what I think we're doing here is we're trying to -- -- find a level -- you know a new high level where we can service that was arranged.

As we move into September now where will start give more headlines out of monetary policy officials.

I will try to handicap the upcoming election yeah.

In the US -- right exactly the US elections also did go back your original premise the Europeans have come back those of them that.

Are on vacation to head winds will pick up out of Europe and then we'll say well what's the Federal Reserve gonna do about it.

So that's why was kind of wondering have we hit the bottom what is the Fed come in and not take action in the fall and and we start to seed money flowing back.

For the sake of safety in the US by assets.

Well it you know I think the question is what kind of headlines -- get out of Europe you know if they're not constantly reminding you -- -- possible hurricane coming towards your house.

You don't worry about buying insurance but we start getting a lot of bad headlines again coming out of there and there's a lot of rank were about.

You know Greece or the bond buying program.

-- people are gonna come back into the treasury market I think pretty pretty quickly.

-- still relatively low interest rates are here for awhile that's fair sister question whether we had a an actual bottom destroy our time I would I would are your private you know we're gonna cap out here at some point.

And almost certain -- their poster ranges we move into September October and try to.

You know reassess events as they evolve always good to talk to Chris -- UBS thanks -- lot for coming on.

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