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Posts Tagged ‘ Treasury Market ’
Treasury Market Panic Reversal Due To Little Known Forces Called Supply and Demand
The Treasury market panic saw a bit of a reversal this week, partly due to an unexpected, large increase in supply because of a sharp drop in Federal tax revenues over the past couple of weeks, and partly due to the market misunderstanding of Thursday morning’s news. The “better than expected” weekly unemployment claims...
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Treasury Market About Face- Just a Blip or Sign of Things To Come?
I mentioned in my last free report that the bulge in withholding tax collections which may have been a tipoff to the better than expected payrolls data, had subsided. I took another look at the data today, and there’s been no rebound since I posted that report. On top of that, yesterday the Treasury...
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Bulls In Clover While TBAC Is Smoking Dope As Usual
The Treasury market panic continued this week, with yields heading for new lows, thanks partly to a return of central banks to the table at a modest level, but mostly due to a ratcheting up of public buying. Bond fund inflows hit a record last week. It’s sheer panic. Bedlam. The panic atmosphere has...
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Hints of Sea Change In Treasury Market
Treasury yields fell to a key resistance level, and then rebounded sharply to break a 6 month downtrend line this week. It’s too early to call a turn, but the fact that it happened during a week when Treasury supply was non-existent—actually there was a paydown—and when foreign central banks showed up and actually...
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European Panic Sweeps 700 Pound Gorilla Under The Rug
The Treasury rally got some help this week from a surge in Federal Withholding Tax collections that is helping to keep new supply down. Whereas new supply had been exceeding TBAC estimates for the past couple of months, it has come back in line with estimates, and could be reduced even further in the...
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The Last Ponzi Game
This is an extended excerpt from the Wall Street Examiner Professional Edition Treasury Report, a companion report to the Fed Report to be posted later this weekend. Subscriber link to the complete report is at the end of the excerpt. A heavy Treasury auction schedule with a big settlement on Thursday was enough to...
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Minyanville Interview With Lee Adler: What to Expect From Treasuries, Central Banks, Politics in 2012
What’s the big story for 2012?
I think that finally this’ll be the year that Treasury yields begin to rise. A lot of people, a lot of smart people have been bears on Treasuries and have been wrong about it. The technical work that I do has said ...
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Unreported Bedlam In Treasuries Signals Massive Panic
The following is an extended excerpt from the Wall Street Examiner Professional Edition weekly Treasury update. The subscriber link to the full report is at the end of this summary. Last week was a light auction week with a net of just $3 billion in new supply settling on Thursday. That took the pressure...
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Does Treasury Market Turkey for Bulls Mean Stock Market Turkey for Bears?
Foreign central bank (FCB) buying of Treasuries was again heavy this week, two weeks after hitting a record level. Their buying binge of recent weeks pumped plenty of cash into US markets. That normally leads to a stock market rally, but not this time. Meanwhile, there’s evidence that withholding tax collections are weakening versus...
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Foreign Central Banks Have Left the Building
Tracking foreign central bank (FCB) holdings of US Treasury and Agency (Fannie, Freddie, and minor government agencies) paper has been one of the most important lines of inquiry in my analysis of market liquidity for the past 9 years. This information is available virtually in real time each week in the Fed’s weekly H41...
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The Treasury Market Will Collapse
Unless foreign central banks step back up to the plate, either the Treasury market will collapse, or the stock market rally will fizzle, or both.
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The Real Meaning Of Twistness
The composite liquidity indicator declined in the week ended October 12 for the third consecutive week, slightly penetrating the 39 week moving average. The growth rate has slowed dramatically versus 2010, while the supply of paper absorbing liquidity, in particular Treasuries, has continued to soar. In recent weeks, the weakness has only been expressed...
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Threads In A Foreboding Tapestry
Two weeks ago I began to report to subscribers of the Wall Street Examiner Professional Edition Fed Report that foreign central banks (FCBs) had begun to engage in unprecedented levels of disgorgement of their massive holdings of US Treasury and Agency paper. Prior to this year, the FCBs had typically absorbed the equivalent of...
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Happy Columbus Day Treasury Market
Foreign central bank dumping of Treasuries and Agencies continued this week, although not at the frenetic pace of the past two weeks. This activity may be beginning to take a toll on the Treasury market, where yields are showing signs of possibly having bottomed. Treasury supply was light with no net new supply settling...
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Checkmate
During QE2, the Fed’s purchases of Treasuries covered virtually 100% of new Treasury supply, freeing up cash that allowed the Primary Dealers (PDs) to speculate elsewhere. With the Fed now absorbing almost none of the new paper, the market faces an additional problem, and it is a huge one. Foreign central banks (FCBs) are...
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Market Not Twisting Fed’s Direction
Liquidity measures were mixed last week. Fed pumping continues at a minimal pace and Operation Twist won’t change that. Foreign central bank buying of Treasuries and Agencies remains exceptionally weak. However, the massive deposit flows from Europe into the US system continued. In spite of that, banks continued to dump Treasuries, adding to the...
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European Bank Runs, Not Ben’s Twist, Gives Market The Runs
The European bank panic, not the Fed’s action, is sending a tidal wave of cash into the Treasury market, causing yields to crash. That sends a false signal which motivates (or forces) investors to sell equities and causes them to infer from the FOMC statement that the Fed expects severe economic weakness. The Fed...
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What Rabbits May Come May Come Must Give Us Pause
Recent panic capital flows into the US have increased liquidity, distorting the Treasury market, which has pulled funds out of equities, sending stock prices lower in the process. If the flow of deposits into the US slows, that could cause a condition where liquidity is insufficient to support the Treasury market, and both markets...
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If Fed Twists, It Won’t Be Like It Did Last Summer
The following is the summary lead-in to the Wall Street Examiner Professional Edition Fed Report. The subscriber link to the full report is below. US banking system measures were mixed last week, allowing the composite macroliquidity index to inch to a new high. The Treasury market continues to act as a black hole absorbing...
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Market expects Operation Twist in Sept
Market expects Operation Twist in Sept
On Friday September 2, 2011, 2:44 pm
By Emily Flitter
NEW YORK (Reuters) - U.S. government bond investors see Federal Reserve action to boost the flagging economy as practically a done deal after Friday's dismal...
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Traders Pulling A Boner On Bernanke’s Meeting Extension?
US banking system measures continued to rise over the last 2 weeks, driving the composite macroliquidity picture to a new high. Until the past week, the Treasury market had acted as a black hole absorbing all of that liquidity at the expense of stocks and commodities. But traders apparently felt that Bernanke had sent...
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Does Bernanke Have A School Term Paper For Natural Disasters?
The Treasury market settled down this week with 10 year Treasury yields hovering above the critical 2.20% that would signal a resumption of the panic, but below the line at 2.30, a breakout of which would signal an upside reversal. The market faced heavy supply and took it in stride this week, with help...
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More Bad News From the Treasury
The Treasury market buying panic continued this week with technical signs pointing to a 10 year yield possibly as low as 1.80, or even 1.60. That would be bad news for stocks. While the indirect bid remains about 25% below last year’s level at the Treasury auctions, foreign central banks have increased their buying...
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Treasury Market and Federal Government Cash Flows Weekly Update
The Treasury market, counter-intuitively, rallied after S&P downgraded US debt. It was a perverse buying panic. In spite of Thursday’s selloff in Treasury’s and poor 30 year bond auction, it’s not clear that that panic has ended. One signal that it has ended might be weekly close in the 10 year above 2.25%. Until...
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Self Reinforcing Vortex of Financial Collapse
What an incredible day and incredible week! Fortunately for us, we foresaw virtually all of what is transpiring in the markets. Although the strength of the Treasury rally has been counterintuitive, we have seen clear reasons for it, and those reason appears to be receding. It may not be long until the Treasury market...
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Europanic Trumps Debtmageddon
One of the macro liquidity indicators that I track in the Wall Street Examiner Professional Edition Fed Report shows the apparent reason why US financial markets, both stocks and bonds, had retained their buoyancy until the last couple of days. I won’t bore you with the particulars of the proprietary formula used to calculate...
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“Miracle” Europanic Trumps US Debtmageddon, Boosts US Markets
Massive inflows of cash into the US financial system from elsewhere around the world boosted liquidity indicators last week and kept a bid under US financial asset prices. Under normal circumstances, in the absence of quantitative easing we would expect prices to fall, but these are not normal circumstances. It’s not a matter of...
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Liquidation of Stocks Required To Keep Treasury Yields Low
The markets faced massive Treasury supply this week and shook, rattled, and rolled as a result. Surprise, surprise, surprise—not— the Treasury market got the benefit of the instability, as investors were scared out of stocks and all things European, and into Treasuries. However, in case you didn’t notice, after last week’s big Treasury rally...
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