Tag Archive: Bonds

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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Real Dollar ‘Privilege’ On Display (again)

2021-04-08

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2021-04-08

Personal Income, 2014-2021
Twenty-fifteen was an important yet completely misunderstood year. The Fed was going to have to become hawkish, according to its models, yet oil prices crashed and the dollar continued to rise. Both of those things were described as “transitory” by Janet Yellen, and that they were helpful or positive (rising dollar means cleanest dirty shirt!), but domestically American policymakers’ clear lack of conviction and courage about that rate hike regime...

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Weekly Market Pulse: Buy The Rumor, Sell The News

2021-04-05

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2021-04-05

There’s an old saying on Wall Street that one should “buy the rumor, sell the news”, a pithy way to express the efficient market theorem. By the time an event arrives, whatever it may be, the market will have fully digested the news and incorporated it into current prices. And then the market will move on to anticipating the next event, large or small. What prompts this review of Wall Street folk wisdom is the most recent employment report.

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FX Daily, March 18: Dovish Fed but Yields Rise, Helping the Greenback Recover from Yesterday’s Slide

2021-03-18

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2021-03-18

Overview: Asia Pacific equities mostly advanced after the US benchmarks recovered following the dovish FOMC. Australia, New Zealand, and India did not participate in today's gains. European bourses edged higher, but US shares are struggling, and the NASDAQ futures are off nearly 1%, threatening to end the three-day rally. 

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FX Daily, March 11: Risk Extends Gains Ahead of the ECB

2021-03-11

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2021-03-11

Overview: Even though the NASDAQ closed lower yesterday and the reception of the 10-year Treasury auction did not excite, market participants are growing more confident.  Led by China, the major markets in the Asia Pacific region rallied.  The Shanghai Composite's 2.35% gain not only snaps a five-session slide but is the largest rally since last October.

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What Gold Says About UST Auctions

2021-03-11

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2021-03-11

US Treasury & Auction Rates, 2018-2021
The “too many” Treasury argument which ignited early in 2018 never made a whole lot of sense. It first showed up, believe it or not, in 2016. The idea in both cases was fiscal debt; Uncle Sam’s deficit monster displayed a voracious appetite never in danger of slowing down even though – Economists and central bankers claimed – it would’ve been wise to heed looming inflationary pressures to cut back first.

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Deja Vu: Treasury Shorts Meet Treasury Shortages

2021-03-10

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2021-03-10

UST Yield Curve, 2013
Investors like to short bonds, even Treasuries, as much as they might stocks and their ilk. It should be no surprise that profit-maximizing speculators will seek the best risk-adjusted returns wherever and whenever they might perceive them.

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Three Things About Today’s UST Sell-off, Beginning With Fedwire

2021-02-28

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2021-02-28

UST Yield Curve, 1990
Three relatively quick observations surrounding today’s UST selloff.1. The intensity. Reflation is the underlying short run basis, but there is ample reason to suspect quite a bit more than that alone given the unexpected interruption in Fedwire yesterday.

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Nine Percent of GDP Fiscal, Ha! Try Forty

2021-02-25

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2021-02-25

Japan CPI, 2006-2021
Fear of the ultra-inflationary aspects of fiscal overdrive. This is the current message, but according to what basis? Bigger is better, therefore if the last one didn’t work then the much larger next one absolutely will. So long as you forget there was a last one and when that prior version had been announced it was also given the same benefit of the doubt.

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For The Dollar, Not How Much But How Long Therefore How Familiar

2021-02-24

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2021-02-24

US Dollar / Brazilian Real, 2020-2021
Brazil’s stock market was rocked yesterday by politics. The country’s “populist” President, Jair Bolsonaro, said he was going to name an army general who had served with Bolsomito (a nickname given to him by supporters) during that country’s prior military dictatorship as CEO of state-owned oil giant Petróleo Brasileiro SA. Gen. Joaquim Silva e Luna is being installed, allegedly, to facilitate more direct control of the company by the federal...

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What Might Be In *Another* Market-based Yield Curve Twist?

2021-02-23

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2021-02-23

Pro forma CES Private Payrolls, 2020-2021
With the UST yield curve currently undergoing its own market-based twist, it’s worth investigating a couple potential reasons for it. On the one hand, the long end, clear cut reflation: markets are not, as is commonly told right now, pricing 1979 Great Inflation #2, rather how the next few years may not be as bad (deflationary) as once thought a few months ago.

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Weekly Market Pulse – Real Rates Finally Make A Move

2021-02-22

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2021-02-22

Last week was only four days due to the President’s day holiday but it was eventful. The big news of the week was the  spike in interest rates, which according to the press reports I read, “came out of nowhere”. In other words, the writers couldn’t find an obvious cause for a 14 basis point rise in the 10 year Treasury note yield so they just chalked it up to mystery.

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