Archive for July, 2014

Treasury Market Commentary

Friday, July 11th, 2014

Via Richard Gilhooly at TD Securities: 10yr Treasuries are holding their post-auction gains and yields are 10bp lower on the week for the biggest weekly rally in 4 months. News articles this morning attribute this move mainly to Portugal, with the FOMC minutes being paid little attention. Often, it is the ...

FX

Friday, July 11th, 2014

Via mark Chandler at Brown Brothers Harriman: Within the trading ranges, the dollar has weakened marginally against the major currencies over the past five sessions.  Sterling is the main exception and it is only fractionally low (0.13%, according to Bloomberg).  Softer economic data has encouraged some consolidation after an impressive run-up. ...

Investment Grade Credit Recap

Friday, July 11th, 2014

Via Bloomberg: IG CREDIT: Lowest Trading Volume of the Week Seen Thursday 2014-07-11 09:49:01.439 GMT By Robert Elson July 11 (Bloomberg) -- The final Trace count for secondary trading was $9.7b vs $12.7b Wednesday and $5.5b the previous Thursday. 10-DMA at $11b; 10-DMA of only Thursday sessions is $12.7b. * FCX 3.875% 2023 repeats as most active issue; two-way client flows accounted for 79% of volume * BUD 1.375% 2017 was next; client flows at 72% * VZ 6.55% 2043 was 3rd; client flows took 87% of volume * Forest Labs (ACT) 5% 2021 topped the 144a most active list; two-way client flows accounted for 83% of volume * BofAML IG Master Index at +109 vs +108; +106, its low for 2014 and the tightest spread since July 2007 was seen June 24; year wide +132 * Standard & Poor’s Global Fixed Income Research IG Index, at +142 vs +141, 2014’s low and the post-crisis low; +164, the wide for 2014 was seen 4x in Feb * Markit CDX.IG.22 5Y Index closed at 57.8 vs 57.1; 55 was seen July 3, a new 52-week low and the lowest level since Oct 2007, vs 57; 52-week high of 97.6 was seen June 24 * There was no IG issuance, the first non-Friday full session zero day since January * Barc, Citi, GS top the IG manager’s list for the week * IG issuance YTD remains at $829.445b * ENTEL added to the pipeline

Merrill Lynch Research on Consumer Spending

Friday, July 11th, 2014

Bank America Merrill Lynch has an internal model which tracks the debit card and credit card spending of its clients. That model is manifesting robust retail sales in June. That contrasts with this WSJ story. Via Merrill Lynch Research: Consumer spending improves in June  The BAC internal data showed a notable improvement ...

July 11 2014 Opening

Friday, July 11th, 2014

Prices of Treasury coupon securities have registered modest gains in overseas trading. The topic du jour yesterday was the Portuguese bank named after the Holy Spirit but that tension has subsided somewhat. I do not follow the bonds of that county but follow Spain as a barometer. At this time ...

Treasury Flows

Thursday, July 10th, 2014

Via RBS Securities: Before the auction, our Treasury flows were 2-way in 10’s (real money buying, fast money selling) while fast money was selling 5’s. After the auction, we had real money buying 10’s and fast money selling 7’s. In TIPS, we had 2-way in 5’s by real and fast money, ...

“More than just the Weather”

Thursday, July 10th, 2014

The quote is from this WSJ story which chronicles the woes of retailers post the polar vortex spolied winter quarter. According to the story an eclectic group of retailers reports light traffic and a cautious approach to opening one's wallet when in the store. Via the WSJ: Slowing Customer Traffic Worries U.S. ...

Overnight Data Watch

Thursday, July 10th, 2014

Via Robert Sinche of Pierpont Securities: CHINA: Over the next few days data on Official Reserves through 2Q2014 and Monetary data for June should be released. Reserves have been growing throughout Asia and the weakening CNY suggests continued reserve growth in China. Within the monetary data, a key focus will be ...

TDSecurites on Bond Auction

Thursday, July 10th, 2014

Via Richard Gilhooly at TDSecurities; The 30yr bond auction is just over 30 minutes away and it looks like stopping at the lowest yield since last June, which was 3.355%, which was around a week before yields jumped sharply higher on Bernanke's hawkish press conference and proceeded higher for the remainder ...

CRT Capital on Bond Auction

Thursday, July 10th, 2014

Via CRT Capital: The most meaningful risk to this afternoon’s 30-year Reopening auction is a repeat of the strong foreign awards seen in June where 18% went overseas for the largest allocation since October ‘13. The strong foreign bidding contributed to the 2.4 bp stop-through and while we’re wary of the ...