Archive for November, 2013

More On Euro

Wednesday, November 27th, 2013

Mark Chandler at Brown Brothers Harriman has a reason for the Euro strength that I had not observed elsewhere on the world wide web. He cites newspaper reports indicating that the ECB might establish a facility similiar to the UKs funding for lending facility. That implies that the ECB would ...

A Yen for Euro

Wednesday, November 27th, 2013

I failed to note the Euro Yen story as it is at a four year high. At the depths of the crisis it traded as low as 95 and prior to the unraveling of the financial world in August 2007 it was in the 160s. This current level close to ...

November 27 2013 Opening

Wednesday, November 27th, 2013

Prices of Treasury coupon securities have drifted lower in overnight trading. ( I thought there would be a dearth of material on the day before Thanksgiving but there is actually quite a bit of information to comment upon and dispense.) Dealers report Asian buyers in the off  the run 5 ...

IMF to Throw Bondholders Under Bus

Tuesday, November 26th, 2013

The New York Times is carrying this story which reports that the IMF will take a haircut from bondholders in any future bailouts. The agency apparently believes that bondholders should feel some of the pain of the citizens of profligate spending countries such as Greece and Portugal. Here is Bloomberg summary ...

Mantra

Tuesday, November 26th, 2013

And every night before your heads hits the pillow remember to say to yourself, "If I know how many equities I own,then I dont own enough!" That should stop the rally!  

Curvature

Tuesday, November 26th, 2013

The 5 year/10 year spread has resteepened and is just about flat on the day after being about 1 basis point narrower. Similarly, the 5s 30s spread which was about a basis point narrower is a tad wider on the day at 248.5. The 5s 10s 30s fly traded inside ...

Swap Spreads

Tuesday, November 26th, 2013

This is like Groundhog Day. I could write the same piece I did yesterday. Swap spreads are wider in the belly by about a basis point. There are several reasons all of which I noted yesterday. The capitulation is complete and those with bad trades have ripped up those tickets. ...

MBS Update

Tuesday, November 26th, 2013

Mortgages are lagging in the up trade today. There was some overnight buying which initially held spreads in check but they have widened since. FNMA 3s are lagging by 2 + ticks and 4s are lagging buy a plus (versus Treasuries). One dealer noted that higher dollar prices has sidelined ...

Treasury Market Update

Tuesday, November 26th, 2013

The Treasury market is grinding higher with an auction of 5 year notes looming large on the horizon at 100PM NY time (the only time). Dealers report modest buying from clients and professional short covering as the proximate cause of the movement. One dealer posited that some of the move ...

Additional Five Year Auction Thoughts

Tuesday, November 26th, 2013

The following views are from a dealer note and reflect a trader's thoughts on 5 year note auctionl As the 5 year point has richened in the ZIRP forever frenzy many have been stopped out of short positions in that sector. He thinks the issue is rich on curve and looks ...