Archive for July, 2008

Opening Comments July 17 2008

Thursday, July 17th, 2008

Prices of Treasury coupon securities have reversed course in overnight trading and some of the recent losses of the longer maturities vis a vis the shorter maturities have been reversed. The yield on the benchmark 2 year note is about unchanged at 2.42 percent and the yield on the benchmark ...

Some Links for Thursday Morning

Thursday, July 17th, 2008

This story from the FT about marginal investment dollars at some of the large sovereign wealth funds seeking investment alternatives to dollar assets is part of the nightmare scenario. They do not need to sell $1 of our assets to cause a rise in interest rates and a repricing of ...

Closing Comments July 16 2008

Wednesday, July 16th, 2008

Prices of Treasury coupon securities dropped today but the bifurcation of the market which began yesterday continued at an accelerated pace today. The declines in the shorter maturities were temperate while the longest maturities took a severe drubbing. (I usually write this later in the day around 330PM to 400PM ...

TIC Data

Wednesday, July 16th, 2008

In the comment section somone asked about the TIC which was released earlier today. I just checked and Brad Setser has his usual excellent analysis of that data available on his blog. I commend you to that site.

MBS and a Little Swaps

Wednesday, July 16th, 2008

Mortgages are wider to swaps by about 7 ticks .There was some reasonably heavy selling by originators, servicers, speculators and money mangers. One participant noted that the street felt long paper and was a better seller. Hedge funds had been better buyers early in the day but that buying quickly ...

Corporate Bonds

Wednesday, July 16th, 2008

Corporate bonds spreads are tighter by 3 ½ basis points when measured by the IG 10. Secondary market trading is by appointment only. The robust equity market rally and the sanguine earnings and dividend news from Wells Fargo has turned the mood less sour, but not quite festive.The new issue ...

MBS

Wednesday, July 16th, 2008

Mortgages have been locked in a very narrow range in early trading. They are 2 ticks to 4 ticks wider to Treasuries. Fast money has been a seller against Treasury debt and their has been some outright selling as clients manage duration. All in all, a very pedestrian beginning.

HSBC Economist on Industrial Production

Wednesday, July 16th, 2008

HSBC: US Jun Ind Production - Autos & Utilities Boost * June industrial production rose 0.5% (consensus 0.1%), boosted by utilities (+2.1%) and auto strikers returning to work * Motor vehicle output rose 5.4%, as auto plants that had been idled due to strikes running late Feb to late May returned to operation * Manufacturing output ...

Agency Open

Wednesday, July 16th, 2008

Agency spreads are opening 4 basis points to 5 basis points wider in New York trading. The recent pattern has been for the market to open wider in NY and then for domestic buyers to arrive like the cavalry to tighten spreads.Freddie Mac did announce $3billion 2 year note which ...

IG 10

Wednesday, July 16th, 2008

The IG10 is opening 2 1/2 wider at 145 1/2 to 146 1/2. One point from yesterday. The analyst downgrade and attendant negative comments about Wachovia Bank had a rather deleterious effect on the CDS. The CDS widened 75 basis points to close the day 370/380.