Tag Archive: Bonds

Weekly Market Pulse: As Clear As Mud

2021-07-19

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2021-07-19

Is there anyone left out there who doesn’t know the rate of economic growth is slowing? The 10 year Treasury yield has fallen 45 basis points since peaking in mid-March. 10 year TIPS yields have fallen by the same amount and now reside below -1% again. Copper prices peaked a little later (early May), fell 16% at the recent low and are still down nearly 12% from the highs.

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And Now Three Huge PPIs Which Still Don’t Matter One Bit In Bond Market

2021-07-15

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2021-07-15

U.S. PPI Commodities Finished Goods Core YoY, Jan 2001 - Jan 2021
And just like that, snap of the fingers, it’s gone. Without a “bad” Treasury auction, there was no stopping the bond market today from retracing all of yesterday’s (modest) selloff and then some. This despite the huge CPI estimates released before the prior session’s trading, and now PPI figures that are equally if not more obscene.

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Third CPI In A Row, Yet All Eyes On That 30s Auction

2021-07-14

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2021-07-14

U.S. Core CPI, Jan 1990 - Jan 2021
Three in a row, huge CPI gains. According to the BLS, headline consumer price inflation surged 5.39% (unadjusted) year-over-year during June 2021. This was another month at the highest since July 2008 (the last transitory inflationary episode). The core CPI rate gained 4.47% last month over June last year, the biggest since November 1991.

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Weekly Market Pulse: Is It Time To Panic Yet?

2021-07-12

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2021-07-12

TNX Daily, Dec 2020 - Jul 2021
Until last week you hadn’t heard much about the bond market rally. I told you we were probably near a rally way back in early April when the 10 year was yielding around 1.7%. And I told you in mid-April that the 10 year yield could fall all the way back to the 1.2 to 1.3% range.

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RRP No Collateral Coincidences As Bills Quirk, Too

2021-07-12

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2021-07-12

Federal Reserve: Liabilities and Capital, Jan 2021 - Jul 2021
So much going on this week in the bond market, it actually overshadowed the ridiculous noise coming from the Fed’s reverse repo. Some maybe too many want to make a huge deal out of this RRP if only because the numbers associated with it have gotten so big.

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Bond Reversal In Japan, But Pay Attention To It In Germany

2021-07-09

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2021-07-09

Japanese Gov't Bond Yields, Jan 2016 - Jul 2021
Yield curve control, remember that one? For a little while earlier this year, the modestly reflationary selloff in bonds around the world was prematurely oversold as some historically significant beginning to a massive, conclusive regime change.

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FX Daily, July 08: Capital Markets Remain Unhinged

2021-07-08

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2021-07-08

The dramatic move in the capital markets continues. The US dollar is soaring as yields and equities slide. The US 10-year yield has fallen below 1.30 to 1.26%  European benchmark yields are 1-4 bp lower, while Australia and New Zealand have seen a 7-9 bp drop today.

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ISM’s Nasty Little Surprise Isn’t Actually A Surprise

2021-07-07

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2021-07-07

U.S. ISM Non-Manufacturing PMI, Employment, Jan 2017 - May 2021
Completing the monthly cycle, the ISM released its estimates for non-manufacturing in the US during the month of June 2021. The headline index dropped nearly four points, more than expected. From 64.0 in May, at 60.1 while still quite high it’s the implication of being the lowest in four months which got so much attention.

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Anyone Remember That Whole SLR Cliff?

2021-07-02

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2021-07-02

UST Yield Curve
Does anyone remember the SLR “cliff?” Of course you don’t, because in the end it didn’t seem to make any difference. For a few weeks, it was kind of ubiquitous if only in the sense that it was another one of those deep plumbing issues no one seems able to understand (forcing all the “experts” to run to Investopedia in order write something up about it).

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A Clear Balance of Global Inflation Factors

2021-06-30

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2021-06-30

Europe HICP and Germany HICP, Jan 2007 - May 2021
Back at the end of May, Germany’s statistical accounting agency (deStatis) added another one to the inflationary inferno raging across the mainstream media. According to its flash calculations, German consumer prices last month had increased by the fastest rate in 13 years.

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Inflation Isn’t Just The Outlier, The Inflation In It Is, Too

2021-06-29

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2021-06-29

PCE Deflator Fed, Jan 2017 - June 2021
Following the same recent pattern as the BLS and its CPI, the Bureau of Economic Analysis’s (BEA) PCE Deflator ran up hotter in May 2021 than its already high increase during April. The latter’s headline consumer basket rose 3.91% year-over-year, its fastest pace since August 2008.

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Sure Looks Like Supply Factors

2021-06-23

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2021-06-23

CME Random Length Lumber Futures, Jan 2020 - Jun 2021
If it walks like a duck and quacks like a duck, then it must be inflationary overheating. Or not? As more time passes and the situation further evolves, the more these recent price deviations conform to the supply shock scenario rather than a truly robust economy showing no signs of slowing down.

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Weekly Market Pulse (VIDEO)

2021-06-22

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2021-06-22

Weekly Market Pulse on June 21, where we look at significant things from last week's events with Joe Calhoun.

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The FOMC Accidentally Exposes Itself (Reverse Repo-style)

2021-06-18

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2021-06-18

UST Yield Curve, Mar 2021 - Jun 2021
Initially, the dots got all the attention. Though these things are beyond hopeless, the media needs them to write up its account of a more fruitful monetary policy outcome because markets continue to discount that entirely.

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Copper Corroding PPI

2021-06-17

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2021-06-17

Copper Futers, Continuous Frn Month, Jan 2002 - May 2021
Yesterday, lumber. Today, copper. The “doctor” has been in reverse for better than two months now, with trading in the current session pounding the commodity to a new multi-month low. Down almost $0.19 for the day, an unusual and eye-opening loss, this brings the cumulative decline to 9.2% since the peak way back on May 11.

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Weekly Market Pulse (VIDEO)

2021-06-15

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2021-06-15

Weekly Market Pulse with Alhambra Investments, interview with Joe Calhoun.

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The Inflation Emotion(s)

2021-06-10

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2021-06-10

The Real GDP Problem, Jan 1988 - 2021
Inflation is more than just any old touchy subject in an age overflowing with crude, visceral debates up and down the spectrum reaching into every corner of life. It is about life itself, and not just quality. When the prices of the goods (or services) you absolutely depend upon go up, your entire world becomes that much more difficult.

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Weekly Market Pulse: The Market Did What??!!

2021-04-19

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2021-04-19

One of the most common complaints I hear about the markets is that they are “divorced from reality”, that they aren’t acting as the current economic data would seem to dictate. I’ve been in this business for 30 years and I think I first heard that in year one. Or maybe even before I decided to lose my mind and start managing other people’s money. Because, of course, it has always been this way.

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Weekly Market Pulse: Nothing To See Here. No, Really. Nothing.

2021-04-12

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2021-04-12

The answer to the question, “What should I do to my portfolio today (this week, this month)? is almost always nothing. Humans, and especially portfolio managers, have a hard time believing that doing nothing is the right response….to anything…or nothing. We are programmed to believe that success comes from doing things, not not doing things.

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Rechecking On Bill And His Newfound Followers

2021-04-09

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2021-04-09

The benchmark 10-year US Treasury has obtained some bids. Not long ago the certain harbinger of bond rout doom, the long end maybe has joined the rest of the world in its global pause if somewhat later than it had begun elsewhere (including, importantly, its own TIPS real yield backyard).

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