Wednesday, January 14, 2009

Treasuries to fall and Dollar to weaken - sounds like people start to talk their Books. TLT, TYX, TNX, FVX, GDX, AUY, SLW

Treasuries Poised to Fall, Dollar to Weaken as Debt Sales Soar
By Daniel Kruger
Jan. 14 (Bloomberg) -- Treasuries will fall over the next six months and the dollar will weaken as the U.S. sells a record amount of debt to finance a budget deficit poised to exceed $1 trillion, a monthly survey of Bloomberg users showed.
Participants turned the most bearish on 10-year U.S. notes since September, while continuing to forecast declining yields on government debt from Germany, U.K. and Japan, according to the Bloomberg Professional Global Confidence Index. The survey, which questioned 2,991 Bloomberg users last week, showed the outlook for the dollar is the lowest since July.
The Treasury’s plan to sell as much as $2 trillion in debt to help the government fund bailouts of financial companies and a stimulus package comes as the Federal Reserve floods the financial system with dollars to end the freeze in credit markets. The amount of assets held by the Fed more than doubled to $2.14 trillion as of Jan. 7 from $909 billion in August, according to the central bank.
“The combination of selling a lot of Treasuries and printing a bunch of dollars to expand the Fed’s balance sheet isn’t necessarily a very positive dynamic over any kind of medium or longer term horizon,” said Jason Brady, a managing director at Santa Fe, New Mexico-based Thornburg Investment Management, which oversees $4 billion in fixed-income assets. Brady participated in the survey.
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