Archive for April, 2014

Corporate Bond Supply Dynamics

Wednesday, April 30th, 2014

Via Merrill Lynch Research: Demand creates supply. High grade new issue supply fell to $95bn in April from $121.3bn in March and $110bn in April of last year. Nevertheless, on a YtD basis high grade issuance for the first four months of the year, at $405bn, remains the highest on record ...

Overnight Preview

Wednesday, April 30th, 2014

Via Pierpont Securities : AUSTRALIA: Leading Economic Indicator reading for March. Slight downward tilt to the index over the last 6 months, but little sign of a major deterioration. CHINA: Tremendous data flow…and quite important as March was first full month after the New Year holiday. 1Q2014 data will be released for ...

Flows Today

Wednesday, April 30th, 2014

Volume was very heavy today relative to the 10 day moving average. Via CRT Capital: Volumes on Wednesday were understandably strong, with cash trading at 130% of the 10-day moving-average for the most active session since mid-April.  5s continued on as the most active issue, with a 33% marketshare, but 7s picked ...

Redistributionist Economics

Wednesday, April 30th, 2014

Bloomberg has an article which a fully paid up subscriber forwarded to me which delves into the increase in spending on healthcare which ObamaCare has motivated. According to the article those who signed up for the plan are more likely to avail themselves of expensive drugs and procedures than non ...

Treasury Update

Wednesday, April 30th, 2014

I was out stimulating the local economy at 200PM so I was not here for Fed announcement. I gather it was a boilerplate non event and month end flows dominated trading until 300PM. One dealer note huge buying of 5 year notes today by domestic end users and late in ...

Meeting Within a Meeting

Wednesday, April 30th, 2014

This story is making the rounds and I have no clue what to make of it. Via the WSJ: Four Board Members Discussed "Medium-Term Monetary Policy Issues"; Details Undisclosed By Victoria McGrane connect Updated April 30, 2014 11:22 a.m. ET WASHINGTON—The Federal Reserve Board of Governors held an uncommon closed-door meeting Tuesday to discuss monetary policy. The four ...

MBS

Wednesday, April 30th, 2014

Up in coupon is the mantra today. One trader observed that from 3 percent to 5 percent every 50 basis points in coupon makes the issue a + better on the day. So 3s are unchanged and 5s are 2+ better. In the 15 year sector the same phenomenon  has ...

Delayed Steal

Wednesday, April 30th, 2014

I think the yield curve flattening (5s 30s now 176ish versus 178 ish earlier) is a little like a delayed steal in baseball. We had a brief rally following GDP and then the market just sat in one spot for awhile. One trader thought that the street was comfortable selling ...

Treasury Supply Analysis

Wednesday, April 30th, 2014

Via TD Securities : The May Treasury refunding announcement brought few surprises, with improving budget dynamics allowing Treasury to announce a cut to 3yr auction sizes to $29B from $30B. Treasury noted that improving budget dynamics will allow them to cut front-end coupon auction sizes further in the coming months, with ...

FX Strikes

Wednesday, April 30th, 2014

Via a fully paid up subscriber: The bulk of the strikes in EURUSD rolling off tomorrow morning are between 1.3800-1.3850 with ~2.5-3bn at those levels according to DTCC data USDJPY strikes are a lot more evenly spread out with about 2-3bn on the 102handle (the bulk of which is 102.0-102.5 but there ...