The Federal Government’s withholding tax collections have rebounded over the past week. This continues the usual pattern of quarterly fluctuations. The annual growth rate this week was around 4.7% in nominal terms and probably 2.2-2.7% in real terms. This report illustrates the trends, and covers the particulars and the implications for Treasury supply and the…
The Treasury Borrowing Advisory Committee (TBAC) is a committee of Primary Dealers that advises the Treasury on its financing needs. Its quarterly forecasts are a major tool in our analytical arsenal. Its current quarterly report forecasts large T-bill paydowns in early November and again in early December.
Primary Dealers are getting longer Treasury coupons and futures and banks are sharply increasing their funding of the Treasury carry trade. Will this be problematic for the markets?
The macroliquidity indicator continues to flatten as the Fed stays the course of reducing outright securities purchases. Bank deposits have again surged to a new high but several other macro liquidity component indicators are on the cusp of breaking the long term uptrends in force since 2009 or 2010. Their weakening in September accurately foreshadowed…
It was a wild week in Treasuries and the Dollar. Both are due to consolidate, and in both cases the long term trends are in question. Those questions could be answered by the trading patterns over the next few weeks. Here’s what to look for to help you decide how to play it.
The sudden drop in tax collection data from a red hot September are ominous. The Fed and the markets could be caught flat-footed.
It was another week of “risk-off” but the pressures of the mid month Treasury settlement are now behind us. The respite may be brief however. The market got less support from the Fed in this round of Treasury settlements, but at the end of the month it will get none at all.
The Federal Government’s tax collections have dropped sharply in the past few weeks. Is the US economy falling off a cliff?
Treasury demand indicators including Primary Dealer Accounts, Foreign Central Banks (FCBs), US Commercial Banks, and US bond funds were mixed in the past week. The only real change and notable item was that foreign central banks were not buyers at the turn of the month Treasury auctions. That’s important.
There’s still plenty of “risk-off” liquidity around to fuel demand for short term Treasury paper, but the “risk-on” liquidity that had supported demand for longer term risk assets is dwindling and a supply problem will only grow in the months ahead. Here’s how it all shakes out.