Archive for January, 2014

Merrill Lynch on Credit Spreads: Buy the Widening

Friday, January 24th, 2014

Credit spreads have leaked wider and I have chronicled that episode regularly here the last two days. Strategists at Merrill believe that one should buy that widening but aver that timing is everything. We are not heading for some September 2008 calamity but it would seem that with the sort ...

Yield Curve Musings Revisited

Friday, January 24th, 2014

On Wednesday I presciently suggested that the yield curve was too flat and one should buy the belly against the back end.  At that time the 5s 30s spread was 206. As I compose this electronic missive that spread rests comfortably around 210 basis points. The 2s 5s 10 spread ...

MBS: Weaker Now

Friday, January 24th, 2014

MBS has flipped and is weaker now. It is about 5 ticks off the best levels of the day. Real money clients have sold and fast money sellers joined the fray. Originators are also sellers at a pace slightly ahead of yesterday's pace.

Corporate Bond Update

Friday, January 24th, 2014

This is my initial post this morning on corporate bonds: Corporate bond spreads are wider this morning. My corporate bond source suggests that they would be even wider if more were trading. He says that on the run bank and finance paper is 3 basis points to 4 basis points wider. ...

T Bills and Other Gemlets

Friday, January 24th, 2014

There has been some odd trading in the one month T bill this morning. That bill closed yesterday at one basis point and has traded as cheap as 15 basis points this morning. The trade at 15 basis points I am told was odd lottish but traded chunky size at ...

MBS

Friday, January 24th, 2014

Mortgages opened the day 2 ticks to 3 ticks wider versus Treasuries. Wider spreads attracted an eclectic group of buyers  and spreads are now 3 ticks to 5 ticks tighter. The cadre of buyers has consisted of fast money shorts, end users and the Federal Reserve.

Corporate Bonds

Friday, January 24th, 2014

Corporate bond spreads are wider this morning. My corporate bond source suggests that they would be even wider if more were trading. He says that on the run bank and finance paper is 3 basis points to 4 basis points wider. The JPM 10 year which priced at 112.5 earlier ...

Swaps

Friday, January 24th, 2014

I just spoke with a swaps market maker about the factors influencing that market. He thinks that for the most part the street and fast money guys have gotten the spread trade right but are wrong on rates. He noted (as I have noted here ) that financial issuance has ...

Turkey turkey

Friday, January 24th, 2014

On Wednesday Turkey sold $2.5 billion of a 10 year note in US dollars at a spread of 299 basis points to the still investment grade US 10 year. This morning, less than 48 hours later, a dealer is quoting those bad boys 337/333. Nice trade for Turkey.

1997 Redux?

Friday, January 24th, 2014

A fully paid up subscriber with a sense of history forwarded this link which provides a detailed discussion of the 1997 currency collapse in Asia.