Bond Traders Weekly Outlook: The Wild Ride of 2023 Moves Onto 2024

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    Yields Tues Close
    2-yr: +2 bps to 4.35%
    3-yr: UNCH at 4.04%
    5-yr: UNCH at 3.88%
    10-yr: -2 bps to 3.89%
    30-yr: -1 bp to 4.04%

    The post-auction rally sent all tenors to fresh highs, but that was not enough to lift the 2-yr note into the green. Treasuries remained near their highs into the close, which kept yields just above multi-month lows that were notched last week.


    Iovance Biotherapeutics (IOVA 5.97, -2.92, -32.9%):
    Announces clinical program update for LN-145 in non-small cell lung cancer; The FDA placed a clinical hold on the IOV-LUN-202 trial on December 22, 2023


    Equity indices in the Asia-Pacific region ended Wednesday on a higher note.

    Japan’s Nikkei: +1.1%,
    Hong Kong’s Hang Seng: +1.7%,
    China’s Shanghai Composite: +0.5%,
    India’s Sensex: +1.0%,
    South Korea’s Kospi: +0.4%,
    Australia’s ASX All Ordinaries: +0.9%.
    Mining names outperformed in Australia as the price of iron ore reached a level last seen in mid-2022.


    November Industrial Profit -4.4% YTD (last -7.8%)



    November Housing Starts -8.5% yr/yr (expected -4.3%; last -6.3%)
    Construction Orders 33.6% yr/yr (last 4.2%)

    The Bank of Japan’s December Summary of Opinions again pushed back against speculation about an imminent exit from negative interest rate policy.
    Japan’s Prime Minister Kishida said that he will push hard for higher yr/yr pay rises in 2024.
    Japanese regulators are expected to take aim at app store monopolies held by Alphabet and Apple.


    Amazon (AMZN 153.50, +0.09, +0.1%): receives FDA letter regarding potentially harmful active pharmaceutical ingredients

    Apple (AAPL 192.95, -0.10, -0.1%): Jony Ive & Sam Altman to work on AI devices for Apple (AAPL), according to Bloomberg


    Major European indices hold modest gains.
    STOXX Europe 600: +0.3%,
    Germany’s DAX: +0.2%,
    U.K.’s FTSE 100: +0.5%,
    France’s CAC 40: +0.1%,
    Italy’s FTSE MIB: +0.3%,
    Spain’s IBEX 35: +0.2%.


    December ZEW Expectations -23.7 (last -29.6)


    Shipping giant Maersk resumed operations in the Red Sea after a recent pause while Hapag-Lloyd will continue using a longer shipping route for at least a few more days.

    Offshore driller Seadrill has been boosted by news of a new $1.1 bln contract with Petrobras.

    Miner Anglo American is reportedly looking to sell a stake in a $9 bln British fertilizer mine.


    S&P 500 futures are up one point and are trading roughly in line with fair value,
    Nasdaq 100 futures are up seven points and are trading 0.1% above fair value,
    Dow Jones Industrial Average futures are down 25 points and are trading 0.1% below fair value.

    The market continues to weigh geopolitical worries after Israel reportedly pledged to continue fighting until Hamas is defeated. Also, Houthi rebels attacked a MSC United VIII container ship on Tuesday, according to Bloomberg, but shipping giant Maersk said it was resuming operations in the Red Sea after its recent pause.

    The 2-yr note yield is down five basis points from yesterday at 4.30%.
    The 10-yr note yield is down two basis points to 3.87%.


    The narrative of “higher-for-longer” dominated through much of 2023, driving rates to levels not seen since 2007. Though if you were to just look at t
    [See the full post at: Bond Traders Weekly Outlook: The Wild Ride of 2023 Moves Onto 2024]

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