Abundant Marketplace Liquidity and Easy Credit Availability – Bond Market Review

Friday saw a repeat for U.S. Treasuries closing out the week on a sharply lower note, yields on the 10-yr note and shorter tenors went their highest closing levels since mid-December while the long bond outperformed, keeping its yield three basis points below its highest close from last month. We saw the same last Friday with yields coming off their lowest levels of the year after the red-hot January jobs report showed headline growth of 353,000, twice as high consensus. … Continue reading “Abundant Marketplace Liquidity and Easy Credit Availability – Bond Market Review”

Rates React to Fed and Strong Jobs – Bond Market Review

U.S. Treasuries closed out the week on a sharply lower note, yields coming their lowest levels of the year after the red-hot January jobs report showed headline growth of 353,000, twice as high consensus. The report fed the rationale that the Fed will maintain its hawkish rhetoric. Notably Chicago Fed President Goolsbee said that the report will not influence policy in the near term, noting that the drop in the average workweek to 34.1 hours from 34.3 hours reflected weakness … Continue reading “Rates React to Fed and Strong Jobs – Bond Market Review”

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”

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?”

Bond Traders Weekly Outlook: Treasuries 2s10s Spread Eases with Input Prices

U.S. Treasuries rallied this week with ten-year yields reversing 11 of the previous week’s 17 bps jump, while MBS yields reversed all of the 24-bps surge. Two-year Treasury yields sank 24 basis points this week, with yields 11 bps lower over two weeks. This week’s action alleviated some more pressure on the 2s10s spread, expanding it by 15 bps to -20 bps. Market expectations for the policy rate at the December FOMC dropped a notable 30 bps this week to … Continue reading “Bond Traders Weekly Outlook: Treasuries 2s10s Spread Eases with Input Prices”

Global Bond Market Performance in 2023

The year 2023 will go down as one of the most traumatic and destructive bond markets on record, for the extreme moves, the money lost, the bank collapses as a result and the glaring statement it made. The statement that many Banks, Treasuries, Politicians and Central Banks have no idea what they are doing with regards to risk and money management and influence. We came from 2022, a year of slowly rising rates at year end with ZIRP in effect … Continue reading “Global Bond Market Performance in 2023”

Catalysts that Empowered 2023’s Treasury Bond Sell Off and Rates to Soar

Interest rates began rising before the end of 2022, then after the first Federal Reserve meeting of 2023 bonds began to fall more sharply, meaning rates rose more steeply. This led to a number of crises that became self-fulfilling such as the Regional Bank crisis. The Federal Reserves’ reaction eased liquidity as the banks were bailed out. This established the next legs of catalyst in the bond rout and with-it soaring interest rates globally. On July 27th the Bank of … Continue reading “Catalysts that Empowered 2023’s Treasury Bond Sell Off and Rates to Soar”

Risk Repriced to Start off 2024

The first week of 2024 had markets scale back bets for the start of a rate cut cycle, simply markets had got ahead of themselves. U.S. Treasuries spent the week selling off as expected with the short covering and bonus enthused rally of 2023 fully sated for now. 2024 has flowed on from how U.S. Treasuries finished 2023, on a mixed note with longer tenors showing relative weakness while the short end underperformed into the impending three-day weekend. This week’s … Continue reading “Risk Repriced to Start off 2024”

Bond Traders Weekly Outlook: Risk Repriced Early in 2024

U.S. Treasuries spent the week selling off as expected with the short covering and bonus enthused rally of 2023 fully sated for now. Markets scaled back bets for the start of a rate cut cycle, simply markets had got ahead of themselves. Treasuries ended the week mixed fashion with the 5-yr note and longer tenors adding to recent losses while shorter tenors recorded slim gains. 10-yr note and the 30-yr bond revisiting levels for the first time in three weeks. … Continue reading “Bond Traders Weekly Outlook: Risk Repriced Early in 2024”

US Treasury Bond Auction Highlights of 2023

Treasury bond auctions tell us about credit, about sentiment and lead other financial markets and financing and political fiscal decisions. We keep an active look at each major Treasury auction to gage the bond market and therefore its impacts on currency and stock markets. Here we look back at the treasury auctions of 2023 in our archive of most of the major auctions 2, 3-, 5-, 10- and thirty-year reopening’s. The narrative of “higher-for-longer” dominated through much of 2023, driving … Continue reading “US Treasury Bond Auction Highlights of 2023”