Archive for January, 2014

Corporate Bonds

Friday, January 17th, 2014

Corporate bond issuance should be on the light side today. As we speak the only announcement out there is IADB which brought a 30 year yesterday and now has room for a 5 year FRN. My friends at Bloomberg who offer excellent information on this subject think that this might ...

Kocherlakota Coos Like Uber Dove

Thursday, January 16th, 2014

The FT interviewed Minneapolis Federal Reserve and he made some very dovish assertions. He is very concerned about inflation being too low. Here is a direct quote fron the FT: “We’re running the risk of being content with inflation running consistently below our target. That’s inappropriate,” said Narayana Kocherlakota, who votes ...

Treasury Market Update

Thursday, January 16th, 2014

When I first sat down at the Open Market Desk in the cold winter of 1979 a trader at First Boston to whom I was speaking counseled me that the key to understanding the market in the short run is knowing or having a sense of dealer positions. If the ...

Response to FT Article

Thursday, January 16th, 2014

Robert Sinche is an economist at Pierpont Securities in the Connecticut. He just published a bit of a rebuttal of the FT article I posted earlier. Via Pierpont Securities: Today at 9:44 AM A Financial Times article today titled “Treasury market poised for jump in foreign inflows” follows on two Pierpont pieces over ...

Miscellany

Thursday, January 16th, 2014

I have not been able to locate cash buyers in Treasury market and from my conversations it appears that the futures market is leading the way here. There have been some large block trades and traders have attributed those to macro based fund buyers. In cash I have heard of ...

Japan as the Next QE

Thursday, January 16th, 2014

I had a difficult time coming up with reasons for the market rally this morning until I read the David Ader piece from CRT Capital and he noted the cheapness of US bonds versus counterparts around the globe. I have since posted a piece on the precipitous plunge in peripheral ...

Cool Chart

Thursday, January 16th, 2014

The WSJs Real Time Economics blog has a cool chart on the recovery from the recession in the US on a county by county  basis. At the current time fully half of US counties have not returned to pre recession output levels.

Yields on Peripherals Plummet Precipitously

Thursday, January 16th, 2014

In my opening post I quoted David Ader of CRT Capital on the decline in peripheral country bond yields. Here is some perspective on the extent of the declines. On December 23 10 year Portugal yielded 6.11 and as I write this the same bond is at 5.25 percent. In ...

January 16 2014 Opening

Thursday, January 16th, 2014

Prices of Treasury coupon securities have registered modest gains in overnight trading. The US fixed income market is not the only market posting gains as a glance at the Bloomberg WB page shows yields declining in virtually every major bond market. I am at a loss for a particular catalyst ...

Merrill Lynch on Corporate Issuance

Wednesday, January 15th, 2014

I have written quite a bit the last several days about the corporate bond supply tsunami. This excerpt is from a Merrill Lynch Research piece which discusses the heavy early in the year flood and the prospects for more financial company issuance in upcoming days. The gross volume of issuance mentioned ...