Treasury supply will increase at the end of the month, but has been very light over the past week, with big paydowns. In addition, the Fed added cash to dealer trading accounts as it held its regular mid month MBS purchase settlements. These flows helped to put a bid into the Treasury market, at least temporarily reversing the big selloff that had been under way since the end of May. The Greece-Troika impasse has provided the perfect excuse for Treasuries to rally and stocks to wobble just a little. What’s bad for the rest of the world is still good for US markets. That’s been the theme since 2009, and it hasn’t changed yet for the Last Ponzi Game Standing.
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