The theme since August 24 in wholesale funding, eurodollar and Asian “dollar”, has been that even the global and intense liquidation was not enough to square the mighty imbalance that has been building. It’s a frightening prospect, but in money markets everywhere that is the only interpretation left. The media, unable to make heads or tails, finds small nuggets of [...]
By most accounts the Asian “dollar” was quiet last night but now the “regular” eurodollar is in full form. That might suggest greater care with these terms as the yen appears to be in that latter mix despite geographically belonging to the former. For purposes of clarification, then, since Japanese banks were among the original sources of the eurodollar buildup [...]
While outward asset markets have clearly been upended by the implications (at long last) of the Fed not doing anything, the internals of the money/”dollar” markets are actually worse. I don’t know if it could be classified as another forming “dollar” wave, but it doesn’t look good from this vantage point heading into an uncertain weekend. In many ways, the [...]
Just a couple of noteworthy prices/developments around the close: 1. Repo rates have come back down, with the GC rates yesterday below IOER for the first time in 16 trading sessions (MBS). Volume in MBS has been quite light recently, with UST volume making up the difference. I can’t see any particular reason for such a marginal shift except the [...]
On this side of “dollar” funding, risk continues to drain, steadily, but rather methodical about it. While China is taking most of the attention, deservedly, credit markets are not enthused about any of what has taken place. Again, I think that is more the yuan’s relation to the “dollar” than of anything else interpreted for or about the PBOC. It [...]
This post is actually a companion to the last, looking into the discrepancy of breakevens with the broader credit market, but I felt it deserved attention all its own. As noted in that prior discussion, there is little indication that credit markets are at all re-evaluating prospects for “inflation” and recovery. If anything, they remain curiously stubborn against it even if [...]
The large selloff in UST on Friday has left many wondering what happened. While the jobs report was certainly a catalyst, it wasn’t really out of line with prior months. It’s not as if credit markets were suddenly awakened to the possibility that Yellen’s FOMC may do what it says, so I don’t think that the Establishment Survey provided any [...]
The inflection points of the past year and a half or so have become waypoints by which to mark the progress toward seemingly darker days ahead. In many respects, as I tried to express earlier today, this is nothing new not just in recent history but in troubling comparison to far worse fates. Those specific dates have taken on added meaning [...]
Whatever bearishness existed prior to December, credit markets clearly shifted beyond to a heightened state of concern. That was not lost on the FOMC internal discussion regardless of what they state publicly, as the action in credit has taken now to levels unmatched by anything seen in the past five years – and it’s not like the past five years [...]
The stock market takes off in holiday celebration of the FOMC being even less clear than it really has been in some time; perhaps going all the way back to Alan Greenspan’s intentional mush. Equity “investors” are happy that the Fed may be happy about the economy, even though there is nothing in actual markets (outside of stocks) to suggest [...]
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