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eurodollar curve

Weekly Market Pulse: Has Inflation Peaked?

By |2021-12-13T07:23:50-05:00December 12th, 2021|Alhambra Research, Bonds, Commodities, Economy, Markets|

The headlines last Friday were ominous: Inflation Hits Highest Level in Nearly 40 Years Inflation is Painfully High... Groceries and Christmas Presents Are Going To Cost More Inflation is Soaring.. America's Inflation Burst This morning on Face The Nation, Mohamed El-Erian, former Harvard endowment manager, former bond king apprentice, economist, and the man who seems to have a permanent presence [...]

(Almost) Everything Sold Off Today

By |2020-03-11T19:48:44-04:00March 11th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The eurodollar curve’s latest twist exposes what’s behind the long end. To recap: big down day in stocks which, for the first time in a while, wasn’t accompanied by massive buying in longer maturity UST’s. Instead, these were sold, too. Rumors of parity funds liquidating were all over the place, which is consistent with this curve behavior. Let’s start with [...]

Whose Tightening Is It Anyway?

By |2018-08-21T16:15:14-04:00August 21st, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I suppose it’s only fair. After all, they started it. Earlier in the year, Federal Reserve officials including Chairman Jay Powell suggested it was all Trump’s fault. The abrupt difficulties presented by the dollar were, they said, the result of tax cuts swelling the deficit and thereby threatening capital markets with a “deluge” of Treasury bills to digest. This past [...]

Curves Have Been Here The Whole Time, Not That Anyone Cared

By |2018-07-10T19:07:04-04:00July 10th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Whether we notice them or not, there are a lot of things that do happen on a seasonal basis. Economists have tried to eliminate these patterns from our thoughts and analysis largely by smoothing them out with seasonal adjustments. But in money as markets there remain these bottlenecks. People have asked me from time to time why I use the [...]

It Matters Which Error

By |2018-07-09T19:07:58-04:00July 9th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We ended last week on a pretty sour note. The eurodollar futures curve has inverted ever so slightly, which isn’t a very good sign of things to come. Since the inversion has to do with different pressures pressing on different parts, convention pays all attention only to the front. It’s there where the Federal Reserve acts out its forecasts. Because [...]

Good Reason To Fear The Futures

By |2018-07-06T17:41:50-04:00July 6th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The eurodollar futures curve has already turned on them. That’s why the sudden interest in things like federal funds futures. If it seemed yesterday with the release of the last meeting minutes that the FOMC members appear to be getting nervous, there is good reason. The eurodollar curve is already slightly inverted. Remember, these contracts deal with probabilities and distributions [...]

You Know What They Say About Appearances

By |2018-01-30T16:46:41-05:00January 30th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It used to be a big deal, the kind of move that would itself move markets all over the world. Very quietly, JPY has been trading higher over recent weeks and has reached a level of appreciation we haven’t seen since those rocky days in early September. Only then, a rising yen (falling dollar) was a sign of bad things, [...]

Deja Vu

By |2017-08-28T19:13:26-04:00August 28th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to orthodox theory, if interest rates are falling because of term premiums then that equates to stimulus. Term premiums are what economists have invented so as to undertake Fisherian decomposition of interest rates (so that they can try to understand the bond market; as you might guess it doesn’t work any better). It is, they claim, the additional premium [...]

Dr. StrangeYellen 2: The Belated Rationality of Post-Crisis Money

By |2016-12-30T17:24:06-05:00December 30th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In 2003, Nobel laureate Robert Lucas wrote admiringly in his Presidential address for the American Economic Association that the field of economics was itself a put-forward solution to the Great Depression. Such was the calamity that enormous intellectual effort was expanded so as to never repeat it. Though with that belated task there is also, or there at least should [...]

Dr. StrangeYellen or: How I Learned To Stop Worrying And Love The Depression

By |2016-12-30T12:58:04-05:00December 30th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The main policymaking body of the Federal Reserve, the FOMC, has had a tortured relationship with eurodollar futures during this past decade. As I chronicled here in greater detail, starting in early 2007 the committee members decided that the deepest, broadest market in terms of money in human history could not possibly reflect accurate expectations. Ben Bernanke had told Congress [...]

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