John Pitera's Market Laboratory Message Board

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To: John Pitera who started this subject	1/25/2002 8:52:37 PM
From: OX	Read Replies (2) of 14090

hi John, re: below from briefing (my bolding)... > It is very difficult to try and fight the defensive tone in Treasuries right > now. However, we are not ready to abandon our expectations for a bullish curve > flattening, as the market has yet to make a distinction between the > inevitability of recovery and the quality of recovery. This is important when > considering that the Eurodollar curve is pricing in some 200 bp worth of > tightening by the end of the first quarter of next year. In addition, the > resilience of the dollar only serves to highlight the deflationary pressures of > globalization, particularly on the back of an unwillingness to delever from what > we perceive to be a structurally weaker US demand profile. those guys on the bond team are bright, but doesn't ED contain a cost-to-carry in their forward contracts? I find it hard to believe a 200bp tightening over a years time. tx for any insight.