Forex Investment and Currency Trading

Since early February, swap spreads in the major markets have moved meaningfully wider. As usual, swap spreads are tales of two ‘legs’ – bonds and swaps. In recent weeks, however, attention has been given mostly to the bond ‘leg’ amid rapidly deteriorating government borrowing and rising prospects for bond purchases by central banks.
A closer inspection of the two swap spread ‘legs’ separately, suggest that most of the rewidening in swap spreads, particularly in Euroland and the US, is attributed to the cheapening of swaps. The latter reflects the recent re-appraisal of interbank pressures, in part stemming from the rise in [...]

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When you buy fixed income securities, typically bonds, you’re lending money to earn some income. The borrower might be a corporation or  a state or federal government.

Why Invest in Bonds?
Buying bonds reflects a decision to make income a higher priority than protection. How much more of a priority is still a matter of degree you can control.

Money is needed Here’s an example. A city may need to raise money to build, renovate, have operating money, or simply to pay off other debts. It hires an investment banker to help. The banker helps determine how much money it will need, how [...]

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It is possible that a double bottom formation could be developing here similar to that seen in 1989 (interim low), 1993 (trend turn) and 2003 (trend turn).
If so, for choice, this looks most like the 1993 pattern around March/April that year.
It was indeed a trend base then, but the resistance level did not give way until virtually 12 months later in March 1994 (the year of a fixed income bear market). The pivotal point on this potential double bottom is much higher at 3.05%. If we were to eventually see a move towards there we would likely be looking at [...]

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At the moment this chart has a pretty classic technical picture.
Firstly we tested and moved marginally below the lows posted in January and March this year (Low was 3.24% compared to 3.28% on 2 prior occasions) and did not quite test the 2003 low at 3.07%.
We then saw a sharp bounce to 3.91% before posting a perfect 76.4% pullback at 3.40%.
In recent days we have taken out the 3.91% pivotal level and accelerated suggesting a re-test of major resistance at 4.29-4.30%. (Sept. 2007 low, Dec. 2007 high and June 2008 high)
If we were to speculate that this move could give [...]

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