Archive for May, 2008

Corporate Bonds

Friday, May 16th, 2008

It is a quiet day in corporate bond land but the market retains a firm tone. The IG 10 opened better but 3 basis points and is holding on to those gains. My most recent conversation with a salesman reveals that cash is 4 basis points to 5 basis points ...

Some Links for a Friday Morning

Friday, May 16th, 2008

Federal Reserve Governor Mishkin on a regulatory approach to controlling asset bubbles. Another article from the Financial Times with a comprehensive analysis of the issues surrounding the problems which central bankerss face when they confront a bubble. Iceland bailed out by Scandinavian countries.

University of Michigan

Friday, May 16th, 2008

The University of Michigan consumer sentiment data (preliminary) for May paints a troubling picture. The sentiment number itself registered below expectations (62.5) and was the lowest reading since 1980. There was a double whammy here as one year inflation expectation were 5.2 percent,which is as high as that number has been ...

MBS

Friday, May 16th, 2008

Mortgages are a couple tighter to the Treasury curve and a tad weaker versus swaps. It appears that the frantic pace of buying of the last few days has slowed somewhat this morning.

Opening Comments May 16 2008

Friday, May 16th, 2008

Prices of Treasury coupon securities retreated in overseas trading as most major equity markets posted gains. The yield on the benchmark 2 year note has jumped 5 basis points to 2.47 percent. The yield on the benchmark 5 year note has climbed 4 basis points to 3.12 percent. The yield ...

Arbing the ECB and the BOE

Thursday, May 15th, 2008

The ECB  and the BOE are "shocked" that some one would look to game the the system by taking advantage of it. http://www.ft.com/cms/s/0/8e338cc8-22ce-11dd-93a9-000077b07658.html

JPM on GDP

Thursday, May 15th, 2008

JPMorgan economist Bruce Kasman raises Q2 2008 GDP forecast and suggests that inventory liquidation will cushion the economy  against severe contraction in 2nd half of 2008. The composition of 1H08 US growth looks better We are nudging up our 2Q08 GDP growth forecast from 0 to 0.5% (q/q,saar). This small change largely ...

Closing Comments May 15 2008

Thursday, May 15th, 2008

Prices of Treasury coupon securities surged today as waves of spread product buying and some Treasury buying propelled prices higher. Economic data released today, on balance, supported the theses that the economy remains quite sluggish. Additionally, today is the day on which the Treasury pays off maturing debt, pays interest ...

Corporate Bond Musings

Thursday, May 15th, 2008

I had a long chat with a former client who manages some corporate bond money for a large institutional entity. He notes that the corporate bond market has experienced a significant recovery in the two months since the Bear Stearns. Liquidity has improved significantly though the ability to buy and ...

Swaps

Thursday, May 15th, 2008

Swap spreads are 3 basis points to 4 basis points tighter across the curve today. Some of that reflects short covering in Eurodollars and some of it is the result of a market wide epiphany that the Federal Reserve will be on hold for awhile. Volatility has also declined today ...