You're watching...
Morgan Stanley fixed-income strategist Kevin Flanagan on how the ECB decision on setting a yield band target under a new bond-buying program could imp...
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Thank you Lauren.
And here's on the ten year treasury is reacting to all of this news unchanged at one point 68% but look how low -- still list.
Camden plant again this is as bread and butter he's the chief fixed income strategist at Morgan Stanley Smith Barney.
Given you look at that yield is that it.
It didn't right now has that been solely driven by the stream of bad news -- we've -- getting out of Europe and you expect that to continue for the months to come.
I think the primary reason why we've been stuck below this 2% threshold does have to do.
With that safety premium that flight to quality trade and in emanates from the concerns that you're seeing over in Europe and it's funny.
In your prior segment you know we were focusing.
All along the Fed really the Central Bank I think that's gonna have the potential to move treasury yields one way or the other and -- visible fashion is the ECB.
We've done the I'm sure you heard the news that we've been reporting -- on the ECB considering setting a yield band target for new bond buying.
How do you think that plays out d.s that -- what form does it take does it happen.
Yeah I mean there's obviously you know where there's smoke there's going to be some fire that's -- I would look at -- so I think they are moving down that road.
The question is gonna be more or -- the timing of -- -- -- -- -- obviously you can't -- on monetary target out because the markets move accordingly and -- the ECB's gonna have to obviously purchase the bonds based upon that environment so I think you're probably gonna get something like that they're calling -- the conditional bond purchase program now we just wait for the details do you get -- -- September 6.
When you get him on October 4.
Yes and but it sounds like.
It least in the short when it could have been potentially.
A great deal of volatility out of Europe and volatility.
May be in treasuries because you have that ECB meeting.
You have the -- you have that constitutional court decision coming out of Germany and I'm just name and not three things right there.
You know I mean beginning next week with Jackson Hole really -- -- coming out of the blocks after Labor Day two weeks chock full of potential headline events to move the markets most of them are based on the other side of the Atlantic and even though we get a jobs report here in the US yeah I think the ECB the German court decision and what happens with the troika that's gonna ultimately be the key barometer for treasury rates.
It was great to see Kevin you're welcome back any time great analysis Kevin Flanagan -- Morgan Stanley Smith Barney.
