Archive for December, 2013

Data Dependent

Wednesday, December 18th, 2013

One point to make is that the market will turn much more volatile around data points. The FOMC gave its forward guidance that rates will stay low well after 6.5 percent level reached. That statement is true as long as the data is supportive. What happens if the labor market ...

Belly Buyers

Wednesday, December 18th, 2013

Latest slew of notes and conversations say that real money and relative value hedge funds buying off the run 5s. The 5s 30s spread is close to 239. It was 234 before number and is just shy of the 240 wide touched briefly yesterday.

Update

Wednesday, December 18th, 2013

making the rounds of contacts I am hearing that most of the movement thus far is professional traders trading emotionally. many large accounts are closed for the year and will need some sort of verbal hand grenade to make a major move. There is still a 7 year note to ...

Quick Update

Wednesday, December 18th, 2013

Mortgages about five ticks wider to Treasuries since statement.I have heard of  some hedge fund buyers of thirty years versus the belly.

Midmorning Miscellany

Wednesday, December 18th, 2013

MBS opening marginally tighter according to one source. Fifteen year paper lagging thirty years by a tad. This particular trader believes MBS market in equilibrium ahead of the FOMC. I wrote yesterday about swap spreads hitting the lowest level since the dawn of recorded human history. The 2 year spread is ...

Bloomberg Says Fed to Delay Basel Leverage Rules

Wednesday, December 18th, 2013

Bloomberg has published a story that the Federal Reserve may delay implementation of leverage rules for large banks until the Basel group completes its process. There are no details in the story but one analyst I read suggests that stories have circulated that there will be a relaxation of some ...

Europe Front End

Wednesday, December 18th, 2013

The front end of Europe has stabilized today after several rocky days.Three month and six month Euribor settings were unchanged with the market anticipating another round of increases. The LTRO operation added nearly 12 billion Euros and one analyst I follow calculates that this liquidity provision today in concert with ...

December 18 2013 Opening

Wednesday, December 18th, 2013

Prices of Treasury coupon securities have registered very modest losses in a session dominated by anticipation of the outcome of the most hyped FOMC meeting in many a year. The yield curve steepened and rates are a tad higher across most of the Treasury complex. The 5s 10s spread at ...

End of Day December 17 2013

Tuesday, December 17th, 2013

The bond market rebounded from its lows following the 2 year note auction and the longer end rallied to finish the day with gains. Dealers reported real money sellers in 5s and spec sellers in 10s. There was also hedge fund unwinds of 5s 30s flatteners. In swaps real money ...

MBS

Tuesday, December 17th, 2013

Mortgages were about 6 ticks tighter to Treasuries early but have surrendered the preponderance of those gains. They are now one tick to two ticks tighter as both real money and fast money have been sellers.