Tag: mortgages

It was vicious week for bond markets this past week as yields continued to rise and then saw bust out moves after Fitch lowered U.S. debt from AAA to AA+. U.S. Treasuries finished the week rallying after the July jobs report. Ten-year Treasury yields rose 8bps for the week to 4.03%, after trading up to 4.20% Friday following the release of July payroll data. This was within two bps of the October 21st high, which was the peak yield back … Continue reading “Bond Traders Weekly Outlook: Long End Adjusting to Rising Inflation and Increased Funding Needs”

U.S. Treasuries ended the week higher note, pressuring yields from their highest levels in three weeks influenced by the effects of decisions by the Fed, ECB and the Bank of Japan’s relaxation of its yield curve control. The market received a sizable batch of data that reminded about stubborn but improving inflation with US core PCE and Germany in recession. The main driver of inflation in the cycle has been energy prices, crude oil settled at its best level since … Continue reading “Bond Traders Weekly Outlook: Yields Squeeze Higher Following Fed Move”

U.S. Treasuries corrected some of last week’s rally except with the long bond that actually gained 2 basis points on the week. Weakness was in the short end with the 2-year losing 13 bps for the week. The specter of new supply could be weighing as could the specter of Fed Chair Powell trying to rein in the “one and done” mantra. There could be residual activity around last week’s inflation reports before PCE lands post the next Fed meeting. … Continue reading “Bond Traders Weekly Outlook: Specters of New Supply, FOMC and PCE Ahead”

U.S. Treasuries finished the week firmly in the green despite gave back some recent gains on Friday. The key CPI and PPI both came in mellower than expected giving the bond market strength. However better-than-expected Consumer Sentiment survey from the University of Michigan (actual 72.6; consensus 65.6) on Friday eventually sent all tenors to fresh lows in the early afternoon. Today’s pullback trimmed some of this week’s gains but yields on the 10-yr note and shorter tenors all fell more … Continue reading “Bond Traders Weekly Outlook: Treasury Yields Pulled Back with CPI and PPI Disinflation”

U.S. Treasuries in a volatile week saw the 5-yr note and shorter tenors reclaim some of their losses from Thursday after the stronger than expected ADP employment report was tempered by a much tamer BLS jobs report. However, the 10s and 30s added to this week’s losses. The 2-yr note recovered Thursday’s entire loss, continuing this week’s outperformance, which alleviated some pressure on the 2s10s spread, widening it by 17 bps to -89 bps. We get more volatility next week … Continue reading “Bond Traders Weekly Outlook: Higher for Longer Threatens Long Duration Portfolios”

U.S. Treasuries closed out the second quarter with yields on the 10-yr note and shorter tenors near levels not seen since the first half of March. On Friday there was some support from The PCE Price Index growth rate slowed to a two-year low of 3.8% yr/yr from 4.3% in April while core PCE was up 4.6% yr/yr, down from 4.7% in April. This week’s action compressed the 2s10s spread by another five basis points, sending it to -106 bps. … Continue reading “Bond Traders Weekly Outlook: Key 2s10s Treasury Spread Compressed 50% In Second Quarter”

U.S. Treasuries showed solid gains across the curve to finish the week. Friday’s move was fueled by flash June Manufacturing and Services PMI readings from major economies. These came at the time major central banks including the Fed, BoC, RBA, SNB, ECB, and the Bank of England are threatening more rate hikes. This week’s underperformance in shorter tenors put additional pressure on the 2s10s spread, which compressed by seven basis points since last Friday to -101 bps. U.S. Treasuries $12 … Continue reading “Bond Traders Weekly Outlook: Treasuries Gain as Recession, Flight to Safety Risks Grow”