Archive for April, 2014

April 04 2014 Opening

Friday, April 4th, 2014

Today is the day when bond market participants have an opportunity to cal red or black as we wait for the monthly labor report at 830AM. It was an extremely quiet evening. Some of the folks who send overnight updates did not write any so I have little info on ...

More Risky Credit Product

Thursday, April 3rd, 2014

This FT article about sellside strategists and analysts warning against the current pricing of credit product is a perfect complement to this post and this post. Via the FT: ‘Sellside’ warns on high junk bond valuations By Vivianne Rodrigues and Tracy Alloway in New York A growing cadre of bond specialists employed by the ...

MBS

Thursday, April 3rd, 2014

Mortgages are 1+ to 2 ticks tighter to Treasuries amidst very light client flows. Fifteen year paper is lagging the 30 year sector and is in line with Treasuries. Supply from originators is quite light. One trader noted strong demand from banks for 15 year paper (ongoing) and the same ...

Treasury Market

Thursday, April 3rd, 2014

The Treasury curve is a bit flatter than where it was when I marked it at 600AM. The 5s 30s spread is 184.8 currently versus 186.1 early this morning . Similarly, 10s 30s has flattened to 83.6 from 84.5. I think this is a function of the buyback in the ...

TDSecurities on ECB

Thursday, April 3rd, 2014

Via Richard Kelly of TDSecurites: The ECB this month left policy rates and liquidity measures unchanged and introduced no new actions. President Draghi did, however, ramp up the rhetoric. The ECB increased the ‘kitchen sink’ verbal defense against the market. The Governing Council added to the opening statement that “the ECB ...

Trade Balance and GDP

Thursday, April 3rd, 2014

The trade balance data this morning disappointed the prognosticators as it widened rather than narrowed. That widening deficit is a drag on Q1 GDP and economics consulting firm Action Economics has reduced its Q1 forecast to 1.3 from 1.8 previously. TDSecurities thinks that this weak trade data will be a ...

Corporate Bond Spreads

Thursday, April 3rd, 2014

Corporate bond spreads are unchanged to a basis point tighter across most sectors. My primary source in this asset class said that at the regular meeting at his shop as salesman are canvassed the overwhelming sentiment is that there is still a wad of cash in customer hands and any ...

Swap Spreads

Thursday, April 3rd, 2014

Swap spreads are about 1/2 basis point wider today across the curve. Client activity is quite light. I spoke with a prop trader and he reported what a market maker told me yesterday. Traders are looking for spots to pay spreads. This prop trader also noted the directionality of spreads ...

Corporate List Thus Far

Thursday, April 3rd, 2014

Via Bloomberg: For today - $b  BBVA Bancomer (BBVASM) A2/na/A-  BBVA/CS/GS 144a/Reg-S  10Y  IPT +185area #$1b  World Bank (IBRD) Aaa/AAA    C/DB/GS Global 4Y  MS -1 $250m  Kimberly-Clark de Mexico (KCMA) na/A-/A 144a/Reg-S 10Y  IPT +130area      BAML/C Added to the pipeline - State Bank of India (SBIIN) Baa3/BBB-. mandated BAML/Barc/BNP/JPM/SBI/SCB/UBS as joint bookrunners to arrange investor meetings ...

Some Client Flow Info

Thursday, April 3rd, 2014

Via RBS Securities: Our flows were central bank buying of 5’s and 7’s while fast money was receiving 10’s-30’s and paying 10yr rate. Last night's inter-dealer Treasury volume was 86% of the 10-day average through 6am.