The stock market rallied like a madman at the end of the week and bonds were also in rally mode for most of the week. The question is where the liquidity will come from to sustain a double barreled rally. Negative interest rates are not a genie in a bottle.
While Treasury supply will be lighter in the first quarter, signs of weakening demand from banks and foreign central banks could spell trouble for both stocks and bonds. Note: If you have previously opened this report, the original may be stored in your browser cache. Be sure to refresh the page or clear your cache…
Both the dollar and the 10 year Treasury yield remain range bound. While they show little sign of breaking out, cyclicality favors an upside breakout for both early in 2016.
As the dollar challenges the highs, the 10 year yield has sunk back into the middle of its long term trading range. Here are the charts and suggested targets.
The Treasury settles $36 billion in new note supply on Monday, wrapping up 2 days where it settled a total of $100 billion in net new paper. That was the climax to a month where it raised and settled $310 billion in new supply. And yet, the markets did not crack. So what should we…
The 10 year yield turned up and the dollar rallied last week. We’re going to hear a loud and clear claim for the blame. As usual, it will be wrong. And that will lead to more serial, cumulative misunderstanding of cause and effect.
The problem we have been anticipating is here. The debt ceiling deal is done and the Treasury is clawing back the $140 billion it had poured into dealer and investor accounts since mid September. That cash reversed the normal October supply/demand balance. It drove the stock market rally. Now the Treasury needs to get that…
This is even more important than the FOMC announcement. Now that the debt limit deal is all but signed, sealed, and delivered, the Treasury will begin to claw back some of the $140 billion in cash it paid to dealers and other investors who held expiring 4 week bills, and maturing 2 year notes that were not rolled over since September 15,
The wild rangebound volatility in Treasuries and the US dollar continued over the past week.
$33 billion in Treasury paydowns last week helped to boost prices for all of one day—from mid day Thursday to mid day Friday, and that was it. Here’s why, and what to expect going forward, with charts, tables and details spelled out.