Excerpt from: Bonds and Interest Rates CFDs and Spread Bets
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| August 10, 2007 | | Spread betting on U.S. bonds | Spread bets and CFDs on the U.S. bond market should take into account that the Federal Reserve has been adding cash to the banking system in order to preserve liquidity. This is paring gains by U.S. Treasuries on the bond market, but the currenty climate still somewhat favours bonds as a safer investment amdist the turmoil of the credit market issues. Bloomberg reports on the Federal Reserve and its move to preserve liquidity:
Gains were pared after the central bank added $19 billion
in temporary funds to the banking system, accepting mortgage-
backed debt as collateral for what is known as a repurchase
agreement. The European Central Bank also once again added extra
funds as losses in subprime mortgages called into question the
value of other types of collateral. | | |
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