The Fed’s balance sheet and US banking indicators remain in the calm before the storm. Or to borrow another cliché, we’re waiting for the other shoes to drop. There are two of them. One will be when the Fed commences actual balance sheet reductions. The other will be when Congress raises the debt limit. Those…
Liquidity Trader Pro Complete
Reports on the Fed and Treasury, primary dealers, foreign central banks, money market and mutual fund flows, and other factors that affect market liquidity. Includes all reports from Federal Revenues Pro Trader, Macroliquidity Pro Trader, and Treasury Supply and Demand Pro Trader. Click here to subscribe. Subscribers, click the post headline to access reports.
Treasury Supply and Demand Pro Trader
The Burden of Proof is on the Bond Bulls
by Lee Adler •
A bond rally is due, but any rally will be a selling opportunity.
Treasury Supply and Demand Pro Trader
US Continuing to Issue New Debt Despite Debt Ceiling, Is A Time Bomb
by Lee Adler •
The Federal Government has continued to issue new debt despite the debt ceiling. It has done so by using its big pile of cash to pay down the debt it owes to Social Security and to government and military pension fund beneficiaries. That internal debt is included in the debt subject to limit. By paying…
US Federal Revenues Pro Trader Report
Strength In Tax Data Tells Us: Panic Now, Avoid the Rush
by Lee Adler •
It’s boom time again in America. The tax data for June tells us that animal spirits have returned. Data from the US Treasury’s Daily Treasury Statement showed that taxes zoomed higher virtually across the board, after a weak start to the month.
Macro Liquidity Pro Trader
Where Did All The TLTRO Go?
by Lee Adler •
We keep seeing reports that economic growth is breaking out in Europe. Wall Street in recent months has been touting “undervalued” European equities. Undervalued compared to what? The hysterical valuations in the US? None of this claptrap squares with the ECB’s monthly data on bank balance sheets. From that perspective, the European economy remains dead…
Macro Liquidity Pro Trader
Macro Liquidity Time Bomb Ticks Toward Zero
by Lee Adler •
US macro liquidity has grown slowly over the past year. Meanwhile, stock price inflation has surged, setting up a large divergence versus liquidity. It suggests that the market has become overextended due to excessive bullish sentiment. This is the mirror image of the oversold reading in February 2016. The difference today is that the Fed…
Macro Liquidity Pro Trader
Financial Indicators In The Calm Before The Storm
by Lee Adler •
The Fed’s announcement that it will soon begin to shrink its balance sheet is the most important step the Fed has taken with monetary policy since it first started outright purchases of Treasuries from Primary Dealers in March 2009. The Fed’s balance sheet and several key banking indicators are currently in the “calm before the storm.”
Macro Liquidity Pro Trader, Treasury Supply and Demand Pro Trader, US Federal Revenues Pro Trader Report
Fed Gets Real With the Boa Constrictor Approach to Tightening
by Lee Adler •
This is a special report for all subscribers to Macro Liquidity, Federal Revenues and Treasury Pro Trader subscribers. Back on April 18, I wrote: By late this year the Fed may have begun to implement its proposed policy of “normalizing” the balance sheet. That’s a nice way of saying “shrinking” the balance sheet. To do…
Treasury Supply and Demand Pro Trader
Here’s Why Bullish Demand for Treasuries Is Setting Up The Sell Signal of The Century
by Lee Adler •
Total Treasury auction demand has been generally stable over the past year, while in a long term downtrend. With stable demand and stable supply, yields have been stable, just above the long term lows set in 2012 and 2016. The supply side is about to become very unstable. While demand looks set to remain stable,…
Treasury Supply and Demand Pro Trader
Oh The Games Treasury People Play Now
by Lee Adler •
The markets have done as we expected, but not for the reason we expected. The meltup could have been worse, and may still yet get worse. But the Treasury figured out how to keep new Treasury supply flowing to market even though we’re at the debt ceiling. That slowed the rally. We’re not sure why…