Heisenberg Report Sees Opportunity in US Treasury Curve
The author of the Heisenberg Report has been buying long-end US Treasurys, specifically VGLT and ZROZ, despite the market's recent struggles.
The author, who describes himself as a contrarian, believes in 'buying humiliation,' or investing in assets that have suffered significant price drops.
However, the author notes that the long-end US Treasury curve has been unable to hold rallies, suggesting ongoing 'structural' selling pressure.
This, combined with the current high nominal GDP growth rate, makes the author hesitant to invest heavily in the long-end US Treasury market.
Despite this, the author plans to continue buying VGLT and ZROZ, citing their potential for asymmetric upside.
As BMO's Ian Lyngen noted, the current 10-year yields are 'generous,' but the market's cautious tone suggests that the 10- and 30-year auctions may struggle.