rhino

No, No, This 2% Is Different From All Those Others

By |2018-01-10T17:32:20+00:00January 10th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The TIPS market corollary to interest rate case impatience is overhyping any round number that might in isolation appear to confirm the bias. To reiterate the mistaken assumption: if you believe that economic growth just happens, then given how much time has passed since that was true or apparent you have to believe each long [...]

Inside and Outside, Market and Models Actually Agree On A Final Failing Grade For Yellen

By |2017-12-14T19:24:56+00:00December 14th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was another pretty embarrassing day for the Federal Reserve and its policymaking body the FOMC. The latter voted, as expected, to raise the federal funds corridor (or double floor, if you can’t get over IOER fail) by another 25 bps. The long end of the Treasury bond market, however, was bid pushing yields down [...]

Seriously, Wherefore Art Thou Collateral?

By |2017-12-07T17:35:32+00:00December 7th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I’m going to go out on a limb and claim there is something seriously wrong in repo. All jokes aside, I know it sounds like a broken record but the dimension that matters is not intermittent collateral problems so much as the greater intensity to them and in a condensing timeframe. Escalation is a description [...]

COT Blue: Bonds Are Not Tuned In To The Mainstream Channel

By |2017-12-05T19:06:22+00:00December 5th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You do have to wonder to whom the increasingly shrill bond market declarations are being directed. It’s very likely that Bloomberg’s now daily haranguing “the yield curve can’t possibly be right” tirades aren’t meant for UST investors. Rather, it is perfectly evident that the treasury market is going to do what it does regardless, and [...]

Three Straight Weeks Can’t Be Ignored

By |2017-10-02T16:59:42+00:00October 2nd, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve Bank of NY reported on Friday that repo fails for the week of September 20 were $359 billion (combined “to receive” plus “to deliver”). That’s the second highest weekly total of this year, following $435 billion fails recorded just two weeks earlier. The week in between those two was also high, tallying [...]

I Repeat

By |2017-09-25T18:58:44+00:00September 25th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The nominal CMT yield on the benchmark 10-year US Treasury note hit its low on July 8 last year. It’s debatable, of course, as to what turned it around; I think “reflation” from there began in Japan and all those whispers of the “helicopter.” It didn’t really matter that the BoJ didn’t really consider the [...]

It Was Collateral, Not That We Needed Any More Proof

By |2017-09-18T16:20:49+00:00September 18th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Eleven days ago, we asked a question about Treasury bills and haircuts. Specifically, we wanted to know if the spike in the 4-week bill’s equivalent yield was enough to trigger haircut adjustments, and therefore disrupt the collateral chain downstream. Within two days of that move in bills, the GC market for UST 10s had gone [...]

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