After a horrible end to 2010 the US treasury market is chopping around in the first two months of the year.  Two factors are working in defense of the bond market.  First a bit of a flight-to-safety trade in light of Mideast unrest.  The second factor is an oversold condition and bearish sentiment.  All the while the yield curve has remained at record levels of steepness.  One can see this reflected in relative equity sector performance as well.  Energy and economically sensitive sectors have outperformed and yield substitutes like utilities have underperformed. One question worth asking is whether Treasury yields have returned to levels that will stanch bond fund outflows?  In today’s screencast we take a look at the state of the bond market.

Items mentioned in the above screencast:

Is the bond market due for a bounce?  (Trader’s Narrative)

A look at the increasingly steep yield curve.  (Calafia Beach Pundit)

Sector performance YTD: energy and everything else.  (Bespoke)

China owns more US government debt than previously thought.  (Real Time Economics)

Daily price chart of the iShares Barclays 20+ Year Treasury Bond ETF (TLT). (Finviz)