Treasuries continue their sell-off today as we are getting signs that a recovery is in our midst (yep, them green shoots). I fully expect that this will continue to happen should we continue to trade off fundamental data. Should the Eurozone blossom into a full fledged panic, all bets are off. I would stay short my duration here and focus on spread product, well credit product. Why credit product - mortgage duration is extending and credit still has a favorable risk/return profile. The risk premium in credit is still attractive relative to historical standards. More on this later.
Disclosure: Long TBT.
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