Tag Archive for 3 Month

Fed Sits Tight As The World Awaits The Appearance of El Toro Grande

Wednesday is the big day as the ECB reintroduces El Toro (LTRO) Grande otherwise known as the big Long Term Refinancing Operation. Everybody, and I mean everybody, expects a flood of liquidity into the markets, with consensus estimates of $500 billion in fresh cash being pumped into the European banking system. Given that 7 of…

ECB To Pinch Hit During Fed Quiet Time, But Market Expects It

The Fed settled a huge chunk of its forward MBS purchase contracts last week, adding significantly to market liquidity while confronted with moderately heavy Treasury supply. It was enough to keep the stock pot simmering, while Treasuries sagged. It was also enough to boost systemic liquidity generally. The next big Fed purchase probably won’t come…

Primary Dealers Prepare to Abandon Ship

The bulge in tax withholding has ended and so has the brief semi-vacation from huge Treasury supply. That will make conditions a little tougher on the Treasury bulls. Also making it tougher will be the likelihood of a normal cyclical downturn in foreign central bank buying due over the next few weeks. A recent trend…

Market Fueled By Huge Rumored ECB Print Job And Corporate Fortress BS

Liquidity indicators backed off slightly from their recent strength last week, but overall they remain firm. I see no reason to expect either a big selloff or a big move higher in either stock or bond prices. The rangebound behavior of the markets shouldn’t change, except for one thing. The rumors are that the banks…