Archive for June, 2014

June 19 2014 Opening

Thursday, June 19th, 2014

Prices of Treasury coupon securities have registered a bifurcated result in overnight trading. The quick way to write it is to note that if you are not the Long Bond then your price is higher. The yield on the benchmark 5 year note edged lower to 1.657 from 1.675 at ...

Japanese Post Office is Big Seller

Thursday, June 19th, 2014

The Japanese Post Office is the second largest holder of JGBs. According to a Bloomberg story forwarded to me by a fully paid up subscriber that entity sold $154 billion of those bonds in the fiscal year ended march 31.In yen terms that is 15 trillion yen and they still ...

US Wants Maliki Removed and Replaced

Wednesday, June 18th, 2014

Via WSJ: U.S. Signals Iraq's Maliki Should Go The White House Is Convinced the Shiite Leader Is Unable to Reconcile With the Nation's Sunni Minority and Stabilize a Volatile Political Landscape. By Jay Solomon and Carol E. Lee Updated June 18, 2014 8:38 p.m. ET WASHINGTON—The Obama administration is signaling that it wants a new government in ...

Swap Spreads

Wednesday, June 18th, 2014

Swap spreads finished the day wider today. Front end spreads were wider by 1 basis point to 1.5 basis points with the repo specialness of the 2 year note fueling that trade.Five year and seven year spreads were a basis point wider with 10s and 30s 1/4 basis point wider. ...

Market Commentary via Richard Gilhooly

Wednesday, June 18th, 2014

In the interest of full disclosure when ever I use Gilhooly's notes I warn that he is a friend and former colleague ( who writes thoughtful commentary). Via Richard Gilhooly of TDSecurities: The FOMC statement had few changes, the dots were slightly higher at the median level, but slightly lower amongst the ...

Late Day Curvology

Wednesday, June 18th, 2014

There has been a significant shift in the yield curve over the course of the afternoon. The 5s 30s spread was 171.3 at 150PM and narrowed inside of 168 at one point and it is now 173.6. Similarly 10s 30s which was 79.6 at 150PM is now 82.1. The 5 ...

Update

Wednesday, June 18th, 2014

I am now hearing of real buyers of the 5 year and 7 year sector.

Update

Wednesday, June 18th, 2014

Market makers reporting a dearth of meaningful trades and lots of noise. I see that in 5s 30s which is back to 171.1 from just inside of 168 earlier.

Fed Thoughts

Wednesday, June 18th, 2014

Several traders with whom I have conversed post FOMC have taken solace in the lower terminal funds rate prediction of 3.75 versus 4.0 previously. I think that is the reason for the curve move (flatter) and one trader who has been preaching lower terminal rate for several months thinks this ...

Quick Take on FOMC

Wednesday, June 18th, 2014

Via Stephen Stanley of Pierpont Securities: Very little has changed from the last statement. Only changes were in 1st paragraph, and were minor tweaks...continue to refer to UER as 'elevated'...all passages regarding policy, were verbatim from the last statement..the moving of the 2016 dot, from 2.25 to 2.50, is being ignored ...