Archive for July, 2014
Thursday, July 31st, 2014
Via the WSJ:
BEIJING—A closely watched gauge of manufacturing activity in China improved in July, the latest sign of recovery in the sector.
The official manufacturing Purchasing Managers Index rose to 51.7 in July compared with 51.0 in June, marking a 27-month high, the National Bureau of Statistics said Friday.
July's PMI also ...
Posted in Uncategorized | Comments Off on China PMI
Thursday, July 31st, 2014
In her Humphrey Hawkins testimony earlier in the month (still July as I pen this missive) Ms Yellen averred that valuations on junk bonds were "stretched". Today the market heeded her words and junk tumbled.
Via the WSJ:
Markets
Junk Bonds Sink on Fears Rally Will End as Economy Picks Up
U.S. Junk-Bond Funds ...
Posted in Uncategorized | Comments Off on Junk Tumbles
Thursday, July 31st, 2014
I regularly quote from the work of David Ader at CRT Capital. Each month hesurveys clients regarding their post labor report intentions. It is always an interesting read:
Via David Ader of CRT Capital:
We had an average showing for this month's survey, which we'll suggest was mainly a function of the ...
Posted in Uncategorized | 1 Comment »
Thursday, July 31st, 2014
There was some MBS buying this morning but that flow has abated and spreads are now a + to 1 tick tighter in 3s and 4s while 4.5s and higher are 3 to 4 ticks tighter. Origination is around $700 million thus far today. One dealer whose note I read ...
Posted in Uncategorized | Comments Off on MBS
Thursday, July 31st, 2014
The corporate bond market is a very quiet venue today marked by a dearth of issuance and a virtual vacuum in cash trading. My favorite source reports that the IG 22 is back 5 basis points since yesterday morning but quoted cash spreads have not moved as much in that ...
Posted in Uncategorized | Comments Off on Corporate Bonds
Thursday, July 31st, 2014
Swap spreads are wide this morning. Two year spreads are out 3/4 basis point and 5s are 1.5 basis points wider. Ten year spreads are 1 basis points wider and 30 year spreads are 3/8 basis point wider.
In Eurodollar futures the reds are down 2 and greens are down 4.
The ...
Posted in Uncategorized | Comments Off on Swap Spreads
Thursday, July 31st, 2014
The Employment Cost Index posted its largest increase since the fateful year 2008 and that has heightened apprehension that the FOMC will remove the spiked punch bowl sooner than previously believed. That fear has prompted another sell off in the market and a pronounced curve steepening. The 5s 10s spread ...
Posted in Uncategorized | Comments Off on Treasury Market Update
Thursday, July 31st, 2014
Via the Good Folks at Bloomberg:
WHAT TO WATCH:
* (All times New York)
Economic Data
* 7:30am: Challenger Job Cuts y/y, July (prior -20.2%)
* 7:30am: RBC Consumer Outlook Index, Aug. (prior 50.5)
* 8:30am: Employment Cost Index, 2Q, est. 0.5% (prior 0.3%)
* 8:30am: Initial Jobless Claims, July 26, est. 300k (284k)
* Continuing Claims, July ...
Posted in Uncategorized | Comments Off on What to Watch for Today
Thursday, July 31st, 2014
This is an excellent research note from Kit Juckes of SocGen on how the market is pricing in Fed tightening.
Via Kit Juckes of SocGen:
Hawkish/dovish FOMC? I'd rather focus on the market move.
The US 1-year interest rate, one year forwards, has now risen to almost 1.2% from only 0.45% last autumn, ...
Posted in Uncategorized | Comments Off on Forward Pricing
Thursday, July 31st, 2014
Via Brown Brothers Harriman:
There were three important signals from the US yesterday: GDP, and the FOMC’s assessment about inflation and the labor market
- Euro area news has been mostly constructive
- Sterling continues to under-perform and this is reflected in the euro's gains on the cross
- Korea’s ruling party got ...
Posted in Uncategorized | Comments Off on FX