Tag Archives: bonds

So much going on this week in the bond market, it actually overshadowed the ridiculous noise coming from the Fed’s reverse repo. Some maybe too many want to make a huge deal out of this RRP if only because the numbers associated with it have gotten so big. To end Q2 2021, financial counterparties “lent” just about $1 trillion to the Fed. Holy cow! A trillion! There’s way too much money! Eh. The RRP, especially around its more informative margins, has little to do...

Yield curve control, remember that one? For a little while earlier this year, the modestly reflationary selloff in bonds around the world was prematurely oversold as some historically significant beginning to a massive, conclusive regime change. Inflation had finally been achieved across multiple geographies, it was widely repeated, and this would create problems, purportedly, as these various places would have to grapple with higher interest rates. The idea behind...

Swiss Franc The Euro has fallen by 0.51% to 1.0852 EUR/CHF and USD/CHF, July 08(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The dramatic move in the capital markets continues. The US dollar is soaring as yields and equities slide. The US 10-year yield has fallen below 1.30 to 1.26% European benchmark yields are 1-4 bp lower, while Australia and New Zealand have seen a 7-9 bp drop today. Signals that the...

Completing the monthly cycle, the ISM released its estimates for non-manufacturing in the US during the month of June 2021. The headline index dropped nearly four points, more than expected. From 64.0 in May, at 60.1 while still quite high it’s the implication of being the lowest in four months which got so much attention. Consistent with IHS Markit’s estimates as well as the ISM’s Manufacturing PMI released last week, there are growing (confirmed) concerns that...

Does anyone remember the SLR “cliff?” Of course you don’t, because in the end it didn’t seem to make any difference. For a few weeks, it was kind of ubiquitous if only in the sense that it was another one of those deep plumbing issues no one seems able to understand (forcing all the “experts” to run to Investopedia in order write something up about it). Whatever this thing was and was going to be, it sounded ridiculously earth-shattering. And then, poof, it was...

Back at the end of May, Germany’s statistical accounting agency (deStatis) added another one to the inflationary inferno raging across the mainstream media. According to its flash calculations, German consumer prices last month had increased by the fastest rate in 13 years. Even using the European “harmonized” methodology (Harmonized Index of Consumer Prices, or HICP), inflation had reached 2.4% year-over-year which was the highest since 2012. Europe HICP and...

Following the same recent pattern as the BLS and its CPI, the Bureau of Economic Analysis’s (BEA) PCE Deflator ran up hotter in May 2021 than its already high increase during April. The latter’s headline consumer basket rose 3.91% year-over-year, its fastest pace since August 2008. The core rate, which excludes food and energy prices, accelerated to 3.39% from 3.11%, the highest since the early nineties. Having gone through this for two consecutive months, the...

[unable to retrieve full-text content]If it walks like a duck and quacks like a duck, then it must be inflationary overheating. Or not? As more time passes and the situation further evolves, the more these recent price deviations conform to the supply shock scenario rather than a truly robust economy showing no signs of slowing down.

[embedded content] Weekly Market Pulse on June 21, where we look at significant things from last week’s events with Joe Calhoun. [embedded content] You Might Also Like Weekly SNB Sight Deposits and Speculative Positions: Inflation is there, CHF must Rise 2021-06-21 Update June 21 2021: SNB intervening. Sight Deposits have risen by +1.1 bn CHF, this means that the SNB is intervening and...

Initially, the dots got all the attention. Though these things are beyond hopeless, the media needs them to write up its account of a more fruitful monetary policy outcome because markets continue to discount that entirely. Dots look like inflationary success if possibly even now more likely, whereas yields and especially bills have (re)taken a more skeptical approach pricing almost no chance for it. Buried in the FOMC minutiae on Wednesday was an upward adjustment...