Archive for January, 2015

Belly on Fire

Friday, January 9th, 2015

The Treasury curve has steepened significantly in the moments following the release of the monthly labor report as investors take solace in the decline in average hourly earnings and in a decline in the participation. I suppose that each of those items might extend the limits of FOMC "patience" before  ...

What to Watch for Today

Friday, January 9th, 2015

Via Bloomberg: WHAT TO WATCH: * (All times New York) Economic Data * 8:30am: Change in Nonfarm Payrolls, Dec., est. 240k (prior 321k) * Change in Private Payrolls, Dec., est. 225k (prior 314k) * Change in Manufact. Payrolls, Dec, est. 15k (prior 28k) * Unemployment Rate, Dec., est. 5.7% (prior 5.8%) * Average Hourly Earnings, m/m, Dec., est. 0.2% ...

Dealer Positions

Friday, January 9th, 2015

Via Bloomberg: IG CREDIT: Dealer Positions Lowest Level in 16 Months 2015-01-09 11:36:27.237 GMT By Robert Elson (Bloomberg) -- Dealer positions in corporate bonds fell $5.2b to $23.1b as of Dec 31. $45.9b, seen March 5, 2014 was the high for the series Fed began April 2013; $23b low was in Aug 2013. * Investment grade positions: * Short ...

FX

Friday, January 9th, 2015

Via Marc Chandler at Brown Brothers Harriman: Dollar Soft Ahead of US Jobs Data - The US dollar is slightly softer amid last minute position adjustments ahead of the US jobs data - A disappointing report could prompt some profit-taking on long dollar positions as it plays into the hands of those who ...

Corporate Bond Trading Yesterday

Friday, January 9th, 2015

Via Bloomberg; IG CREDIT: Highest Volume Since Dec. 2; Issuance Over $40b in Wk 2015-01-09 10:53:06.563 GMT By Robert Elson (Bloomberg) -- The final Trace count for secondary trading was $18b, the highest since $18.1b Dec. 2, vs $16.7b Wednesday; 2014 high was $19.5b, Jan. 15. * 144a trading added $2.4b of IG volume vs $2.9b * Most ...

Kocherlakota Favors No Rate Hike in 2015

Friday, January 9th, 2015

Via Reuters last night: Reuters) - The Federal Reserve should leave short-term borrowing costs near zero for a seventh year in a row, a top Fed official urged on Thursday, citing sliding U.S. inflation and still-high unemployment. The Fed "can best achieve its macroeconomic objectives by not raising the fed funds rate ...

Overnight Yield Curve

Friday, January 9th, 2015

Prices of Treasury coupon securities have registered bifurcated results in overnight trading. Yields at the very front end ( three years and in) are a tad higher while long er dated benchmarks have registered gains with the best gains in the longest maturities. So the market has erased some of ...

ECB QE Planning

Friday, January 9th, 2015

This is from a fully paid up subscriber overseas and exactly as he sent it to me. I do not have the source. *ECB STAFF SAID TO HAVE OUTLINED EU500B INVESTMENT GRADE QE PLAN *ECB STAFF STUDY SAID TO FOCUS ON INVESTMENT-GRADE GOVT BONDS *ECB SAID NOT TO HAVE TAKEN ANY DECISION ON ...

Thar She Blows: London Whale Revived

Thursday, January 8th, 2015

The Wall Street Journal reports on the Federal Reserve's internal investigation of JPMorgan's London trading debacle and reason for the failure of regulators to uncover that mismanaged risk. Via the WSJ: Markets Full Report on ‘London Whale’ Incident Sheds More Light on New York Fed Role Turf Battles, Crisis-Related Distractions Complicated New York Fed’s ...

Early Afternoon Miscellany

Thursday, January 8th, 2015

The Treasury yield curve has steepened rather significantly today. The 5s 10s spread opened at 48.9 and it is now 50.7 . The 10s 30s spread opened at 56 and is now 57.9. The move in 5s 30 is even more dramatic as it moved to 109.6 from 104.7 early ...