Treasuries Slide on EU Plan for Loans to Spanish Banks – Bloomberg 06-29-12

Salient to Investors:

The bid-to-cover ratio for 7-year Treasuries securities was the lowest since October.

Marc Ostwald at Monument Securities said it’s very important to focus on the personal consumption and expenditure.

Ira Jersey at Credit Suisse said it’s hard to like these yields unless you think there’s going to be a significant deflationary impulse, and it’s hard to imagine a significant rally if Europe continues to muddle through and the U.S. economy seems to be stabilizing at lower levels.

PIMCO’s Bill Gross said a debt trap remains even after the European agreement, recommends avoiding Spanish and Portuguese debt in favor of U.S. Treasuries and mortgage securities. Gross said both the peripherals and the core union nations have too much debt. the marginal cost of which is far above nominal GDP growth in respective nations.

Read the full article at http://www.bloomberg.com/news/2012-06-29/treasuries-erase-june-loss-as-pimco-s-gross-bets-on-u-s-debt.html