Bond Traders Weekly Outlook: US Treasury Auctions Outperform Ahead of FOMC

U.S. Treasuries pulled back for the second consecutive day on Friday, resulting in a mixed finish for the week. Inflation watchers saw a milder PCE as expected while Japan’s Tokyo Core CPI rose 4.4% yr/yr in January it was back on topic. The 10-yr note yield settled the week at 3.52%. The 2-yr note yield, which is most sensitive to changes in the Fed funds rate, settled at 4.21%. U.S. Treasuries completed this week’s spectacular note auctions with the $35 bln 7-yr … Continue reading “Bond Traders Weekly Outlook: US Treasury Auctions Outperform Ahead of FOMC”

Strong U.S. 7-year Treasury Bond Auction with International Buyers Highest Since May

U.S. Treasuries completed this week’s spectacular note auctions with the $35 bln 7-yr note high yield of 3.517%, which stopped through the when-issued yield by 2.1 bps. The bid-to-cover ratio (2.69x) well above average (2.48x) while indirect takedown (international buyers) at 77.1%, the highest level since May. This followed yesterday’s 5-year sale which also stopped through strongly. We are seeing a continuation of foreign buyers of US Treasuries stepping up purchases after JGB volatility and uncertainty in Europe with Russia. The … Continue reading “Strong U.S. 7-year Treasury Bond Auction with International Buyers Highest Since May”

Mortgage Refinance Rates Jump 15% with Mortgage Interest Rates at Four Month Low

The pickup in mortgage applications in the US continued last week, rising jumped 7% in the week ended January 20th, 2023, following a 27.9% surge the previous week, data from the Mortgage Bankers Association showed. The move followed the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) down another 3bps to 6.2%, a fresh four-month low. The sharpest gains were in applications to refinance a home loan, up 15%, compared with the previous … Continue reading “Mortgage Refinance Rates Jump 15% with Mortgage Interest Rates at Four Month Low”

Bond Traders Weekly Outlook: U.S. Treasuries Backed Off September Highs on Optimistic Chatter

U.S. Treasuries continued the move from last week through Wednesday giving back most of those gains Friday resulting in a slightly higher finish for the week in most tenors. The long bond ended negative territory for the week while the 10-yr note and shorter tenors gave back most of their gains from Wednesday’s surge that sent yields on these tenors to levels not seen since September. Together with hopeful rhetoric Treasuries and European debt faced pressure at the end of … Continue reading “Bond Traders Weekly Outlook: U.S. Treasuries Backed Off September Highs on Optimistic Chatter”

Norway Holds Interest Rate at 2.75 percent, Signaled More Hikes Ahead

Norway’s central bank, the Norges Bank’s Monetary Policy and Financial Stability Committee unanimously kept the policy benchmark interest rate at 2.75% in its January 2022 meeting, in line with market expectations, and signaled a further rate hike in the upcoming meeting.  The Committee noted that the latest inflation readings were well above the central bank’s target of 2%. said the policy rate will need to be increased somewhat further to bring inflation in line. The bank had five consecutive hikes by December, … Continue reading “Norway Holds Interest Rate at 2.75 percent, Signaled More Hikes Ahead”

Bank Indonesia Raised Rates Another 25 basis points to Highest Level Since 2009

Bank Indonesia increased interest rates by 25 bps during the first meeting of 2023, a sixth consecutive hike, on Thursday as it sought to tame inflation and strengthen the rupiah exchange rate. The benchmark 7-day reverse repurchase rate now stands at 5.75%, the deposit facility at 5.00% and the lending facility at 6.50%, their highest level since 2009 and in line with market forecasts. So far since August last year the central bank has lifted rates by 225bps. Indonesia’s annual inflation rate … Continue reading “Bank Indonesia Raised Rates Another 25 basis points to Highest Level Since 2009”

Strong Demand at U.S. 20-year Treasury Bond Auction Follows Last Week’s Series

U.S. Treasuries traded firmly with the belly of the curve continuing today’s outperformance pressuring yields toward their lowest levels of the day. Earlier we had a lower-than-expected PPI for December. The completion of today’s $12 bln 20-yr Treasury bond reopening, followed the path of last week’s auctions meeting excellent demand.  The high yield 3.678%, which stopped through the when-issued yield by 2.7 bps while the bid-to-cover ratio (2.83x) and indirect takedown (76.3%) were comfortably above average. The desk gave a … Continue reading “Strong Demand at U.S. 20-year Treasury Bond Auction Follows Last Week’s Series”

Bond Traders Weekly Outlook: US Completes Three Strong Auctions with Spectacular International Demand

U.S. Treasuries closed out the week on a lower note, after two days of strong gains around the December CPI report. Fed Chair Powell’s speech at the Riksbank International Symposium offered no anguish and a strong University of Michigan’s consumer sentiment report finished the week. The four-week bill yield jumped nearly 25 bps to 4.45% amid growing focus on the upcoming debt ceiling debate. The week saw three extremely strong auctions. $18 bln 30-yr bond reopening, $32 bln 10-yr note reopening, … Continue reading “Bond Traders Weekly Outlook: US Completes Three Strong Auctions with Spectacular International Demand”

Record Foreign Demand at US Treasury Bond Reopening Completes Strong Auction Week

U.S. Treasuries were led higher by the long bond building on its gain after the completion of this week’s third extremely strong auction. The desk gave an A- rating on the auction. Today’s $18 bln 30-yr bond reopening stopped through by 2.4 bps and benefited from record foreign demand with Japanese investors looking outward after the BoJ shift. It followed these week’s $32 bln 10-yr note reopening, which met excellent demand and the impressive 3-yr note sale. Today’s sale followed the … Continue reading “Record Foreign Demand at US Treasury Bond Reopening Completes Strong Auction Week”

Solid International Demand in 10-year U.S. Treasury Bond Auction Ahead of CPI

US Treasuries rallied Wednesday with most tenors picking up after the completion of today’s $32 bln 10-yr note reopening, which met excellent demand.  The auction drew a high yield of 3.575%, which tailed the when-issued yield by 0.5 bps. The bid-to-cover ratio (2.53x) and indirect takedown (67.0%) were well above average.  Today’s auction followed yesterday’s impressive 3-yr note sale. The market is showing minimal concern ahead of tomorrow’s release of the US CPI report for December.  Another factor was the U.S. … Continue reading “Solid International Demand in 10-year U.S. Treasury Bond Auction Ahead of CPI”