The Dislocation of War and Markets – Traders Market Weekly

Feb 6-12, 2024 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… The Week That Was – What Lies Ahead? Contents Click on the links below to navigate to the relevant section. Editorial This week brought a powerful reminder how disconnected financial markets can be, particularly those in the US are from factors that either don’t directly affect them or unrelated to stock prices. The world was at … Continue reading “The Dislocation of War and Markets – Traders Market Weekly”

Traders Market Weekly: America on Show; Big Oil, Apple, FOMC and Boeing

Jan 28 to Feb 5, 2024 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… The Week That Was – What Lies Ahead? Contents Click on the links below to navigate to the relevant section. Editorial The S&P 500 reset its intraday record high Friday 4906.69 then drifted modestly lower to close the week 4890.97 ending the S&P 500’s six consecutive record closing highs. With so many headwinds … Continue reading “Traders Market Weekly: America on Show; Big Oil, Apple, FOMC and Boeing”

Bond Traders Weekly Outlook: Treasury Refunding, FOMC Headwinds

U.S. Treasuries closed out the week lower in response to stronger than expected personal spending (actual 0.7%; consensus 0.4%) in December and Pending Home Sales for December (actual 8.3%; consensus 2.3%) giving rise to Fed officials hawkish rhetoric ahead. The selling drove the 10-yr yield back above its 50-day moving average (4.129%) while yields on 2s and 5s reversed the bulk of their declines from Thursday. This week’s action alleviated some of the pressure on the 2s10s spread, expanding it … Continue reading “Bond Traders Weekly Outlook: Treasury Refunding, FOMC Headwinds”

Stifled Demand at 7-year Treasury Bond Auction with International Buyers Returning

U.S. Treasuries completed this week’s note auctions with a $41bln 7-yr notes that met stifled demand, post-auction bonds climbed off their afternoon lows. The sale drew a high yield of 4.109%, which tailed the when-issued yield by 0.3 bps. That is 4.109% (When-Issued: 4.106%). However, the bid-to-cover ratio (2.57x vs 2.54x average) and indirect takedown (69.1% vs 68.9%) was up from 63.7% last month. In deference to yesterday’s poor 5-year auction. Equities bounced off their afternoon lows alongside the Treasury market’s … Continue reading “Stifled Demand at 7-year Treasury Bond Auction with International Buyers Returning”

Anemic 5-Year Note Treasury Auction, Tails Two Basis Points

U.S. Treasuries slid to fresh lows in response to the $61billion 5-yr note sale meeting poor demand. The auction drew a high yield of 4.055%, which tailed the when-issued yield by two basis points which was the largest tail since Sept 2022. The bid-to-cover ratio (2.31x vs 2.52x average) and indirect takedown (60.9% vs 68.8% average) were below the average seen at the past 12 auctions. The post-auction slide lifted the 5-yr yield to a fresh high for the week … Continue reading “Anemic 5-Year Note Treasury Auction, Tails Two Basis Points”

Solid Demand at 2 Year Treasury Auction with Higher International Demand

U.S. Treasuries hover near their morning lows as Treasury auctions flood 2024 with another week of heavy supply. The 2-year $60 billion two-year notes auction kicked off this weeks’ auctions and met strong demand. A high yield of 4.365% right at the when-issued yield of 4.365%. Notably six of the last eight 2-year auctions stopped through by an average of 0.7 basis points. The bid-to-cover ratio (2.57x vs 2.73x average) was a bit below average while indirect takedown (65.3% vs 62.9% … Continue reading “Solid Demand at 2 Year Treasury Auction with Higher International Demand”

Traders Market Weekly: Record Highs with Netflix, PCE & Tesla Risk

Jan 21 to 27, 2024 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… The Week That Was – What Lies Ahead? Contents Click on the links below to navigate to the relevant section. Editorial A shortened week but with above-average volume at the NYSE with U.S. stock indices trading at or near their highest levels ever. The S&P 500 closed Friday at 4,839, a new record high. … Continue reading “Traders Market Weekly: Record Highs with Netflix, PCE & Tesla Risk”

Bond Traders Weekly Outlook: What Would a 2024 Global Yield Spike Do?

The bond market has thrown out a challenge to traders and Fed officials and ask themselves was last quarters rip your heads squeeze rally a head fake in an ongoing global bond bear market? Do they downplay the odds of a surprising stronger U.S. economy than forecast? Labor markets remain tight, while many politically motivated pundits call victory on what is in reality already elevated inflation above the 2% goal. We saw UK and Canada both report stronger-than-expected inflation. it … Continue reading “Bond Traders Weekly Outlook: What Would a 2024 Global Yield Spike Do?”

Soft Demand at U.S. 20-year Treasury Bond Auction with Shorter Tenor Underperformance

Today’s $13 billion 20-yr bond auction met weak dollar demand. Treasuries shorter tenors underperformed. The high yield (4.423%) tailed when issued yield by 0.8 bps while the bid-to-cover ratio (2.53x vs 2.64x average) and indirect takedown (62.2% vs 70.7% average) were below average. Equities remain in negative territory with the S&P 500 (-0.8%) fighting to stay above its opening low. The desk gave a D auction grade Auction Highlights Auction grade: D Yields after the auction. Yields before the auction. … Continue reading “Soft Demand at U.S. 20-year Treasury Bond Auction with Shorter Tenor Underperformance”

Using Bid to Cover Ratios to Gauge Bond Auction Strength

Interest rate and therefore bond price volatility has picked up in the past eighteen months as Central Banks have tried to rein in inflation, easy money and regain a semblance of control. With this swift move in rates since October we watch to see if the market chases lower yields with stronger bid-to-cover ratios. The bid-to-cover ratio is a simple way to measure auction strength as it balances demand and supply. In the US with debt seemingly increasing by the … Continue reading “Using Bid to Cover Ratios to Gauge Bond Auction Strength”