Archive for October, 2014

Goldman Sachs on ECB

Tuesday, October 28th, 2014

Via a fully paid up subscriber: EUROZONE VIEW: Goldman Sachs say the ECB meeting next week should be "rather uneventful" with the overall tone in the press statement remaining dovish. Goldman see ECB President Mario Draghi "asking for patience in assessing" the impact of recently announced asset purchases, while hinting at possible further action, including ...

Pension Funds Just Lost Some Duration

Monday, October 27th, 2014

Via WSJ: ENLARGE Earl Gilbert, 97, plays chess in Sun City, Ariz., in January 2013. REUTERS By DAN FITZPATRICK Updated Oct. 27, 2014 7:04 p.m. ET 26 COMMENTS Good news for Americans: You are living longer. The bad news: The longer life span doesn’t bode well for the corporate pension plans that are supposed to support workers into ...

End of Day Analysis

Monday, October 27th, 2014

Via Richard Gilhooly at TDSecurities: The week that will likely conclude QE started quietly in rates, with a mild bid to Treasuries and an offered tone to break-evens as commodity prices continued to weaken. The day started with higher volatility in commodities after the Brazilian election result took BRL to a ...

Today’s Corporate Bond Pricings

Monday, October 27th, 2014

Via Bloomberg: IG CREDIT: $5.35b to Price From Five Issuers to Start Week 2014-10-27 18:33:18.778 GMT By Lisa Loray Oct. 27 (Bloomberg) -- $5.35b is expected to price from five issuers today to start the final week of Oct after $34.475b priced from 25 issuers last week.  Monthly volume to $80.6b, YTD $1.173b. * Four of today’s five ...

Treasury Market Liquidity Revisited

Monday, October 27th, 2014

This is an excellent Bloomberg News article on the short squeeze of October 15 and dealer reactions to the client requests. The article cites one trader "turning off the machines" and dealing as he did in the pre electroninc era. I wrote this on the topic this morning. To be sure record ...

Deja Vu All Over Again

Monday, October 27th, 2014

It appears that history is repeating itself as demand for SUBPRIME auto loans is steamy. This FT article describes that market and wonders if the demand is a toxic legacy of the various QEs. Via the FT: October 27, 2014 12:42 pm Fears grow over QE’s toxic legacy By Tracy Alloway in New YorkAuthor ...

What if The Dems Hold the Senate

Monday, October 27th, 2014

Via TheHill.com author A.B. Stoddard So, let’s just say, what if Democrats survive Election Day? Seriously, even Sen. Ted Cruz (R-Texas) thinks they might. “It’s close enough it could break either way,” Cruz said on Bloomberg television Wednesday. The polls don’t indicate it, the parties aren’t expecting it, the mood of the voters ...

MBS Spreads

Monday, October 27th, 2014

It is the same refrain in MBS today as in other sectors with lack of activity the dominant feature. MBS is out performing Treasuries by about 1 + ticks. One trader attributes the MBS gains to lack of origination selling so buy inquiries are filled from the screens and there ...

Monday Morning Miscellany

Monday, October 27th, 2014

As I noted earlier when I wrote about swaps there is very little client activity this day. Investors and speculators are hunkered down waiting for the FOMC proclamation on Wednesday. I have heard of some central bank buying in the zero to three year sector but the notional on that ...

Swap Spreads

Monday, October 27th, 2014

I wish I could make something up but swap spreads in the words of one market maker are "violently unchanged" today. He anticipated that they would vary very little between now and the FOMC announcement on Wednesday.