With the €130 billion bailout package passed for Greece on Feb. 20, the 10-year Treasury note market looks to stabilize in the coming months.
Regarding Greece, Jack Broz, member of the Chicago Board of Trade and founder of TradeBondFutures.com, says the on-again, off-again nature of the talks caused much uncertainty in the market. “That’s why the market’s drifting along, and that’s why the buying is so light. The money is all sidelined,” he says. “People are just fed up with it. They want to see a resolution happen.” He expects higher interest rates as he anticipates a top somewhere around 134 and bottom at 118. “I won’t be shocked if 10s go up to 134, but then I’m getting short up there, because I think that’s the absolute high. I’m looking for trade to break to the downside and I would say this, if the trade got below let’s say 127-16, then I think, yeah, it will continue to go down.”
Also looking at the Eurozone as the primary drive behind the note, Travis Rodock, senior market specialist at eFutures.com, sees the market becoming more optimistic as Greece has finalized its deal and the U.S. numbers are improving. “As long as [U.S. economic data] continue to improve and the Greece situation looks like it’s stabilized and under control with its debt swap, I think you’re looking at Treasury prices falling back into the January 23 lows and Dec. 27 lows of 129-26 and 129-25.” Though Rodock expects a more optimistic market, he says anything can change, and the upcoming Greek elections in April also will play an important role.