April remains the most favorable month for liquidity given the reduced Treasury supply and the $44 billion in forward MBS purchases that the Fed had scheduled for settlement during the month. The Fed settled $33 billion of that in the week ended 4/14, leaving just $11 billion due to settle by the end of the month. Next week the Treasury won’t need much help as it has scheduled a big paydown. That cash will have nowhere to go as it faces a temporary shortage of paper. Normally that gives all markets a boost in the last couple of weeks of March, but with the nervousness surrounding the SEC suit against Goldman, the Treasury market should get most of the benefit.
Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.
By clicking this button, I agree to the Wall Street Examiner’s Terms of Use.
Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.
