The Treasury curve has developed a negative shape in the one-month to two-month area. The commercial paper market is also negative and its quality spreads are wide. It is no surpruse that this market is having trouble developing confidence in the financial system. Although the equity market has moved up lately, conservative investors may want to wait intil these yield curves and quality spreads are normal.Saturday, April 05, 2008
The Treasury curve has developed a negative shape in the one-month to two-month area. The commercial paper market is also negative and its quality spreads are wide. It is no surpruse that this market is having trouble developing confidence in the financial system. Although the equity market has moved up lately, conservative investors may want to wait intil these yield curves and quality spreads are normal.
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Well, that didn't last long. The yield curve completely normalized on April 9th.
Here is the Yield Curve Graph.
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