Yields on 2 year Treasuries testing 1.72 percent and providing NO support for the USD. Now that's a surprise. NOT.
Mtl JP 15:34:05 GMT - 11/16/2017
Re DEBT... and then there is debt.
Remebering that when YOU deposit money into a bank, YOUR deposit is a in the LIABILITIES column of the bank's book.
IF you are a schlepp like me (i.e NOT a member of european prince-hood) and have a european bank account fwiw and fyi:
‘covered deposits and claims under investor compensation schemes should be replaced by limited discretionary exemptions to be granted by the competent authority in order to retain a degree of flexibility.’ ... “…during a transitional period, depositors should have access to an appropriate amount of their covered deposits to cover the cost of living within five working days of a request.”
In other words... poof goes your 100,000 euro "deposit protection" scheme.
"Much of the Treasury’s debt is extremely short term, somewhat like the second example above. About one fourth of the face value of the debt will mature within the next 12 months, and about half within the next 36 months. About 70 per cent of the debt is due within five years."
This from 2014.... can't find more recent details. Would be interested to find out how much gets rolled every year and what the average duration is of debt held by the 'public'.
Either way what we are looking at is a relatively short term debt structure, especially when compared to other countries, and a massive amount to roll over every year.
Re DEBT... and then there is debt.
At a personal level - level that matters to me - the only thing about DEBT that matters is the associated RISK that I do not control:
political (lame confused bully duck prez) - geopolitical (looking for diversion thru war mongering) - economical (collapse) and financial (stox/bonds collapse and hyper-printing)
There is only one kind of insurance that appears reasonable to me the schlepp: Gold. And an investment in a homestead farm.
Livingston nh 22:47:21 GMT - 11/15/2017
"annual percentage INCREASES"
as an aside folks might consider USD performance into 1985-86 and the return of $10 oil in 1986
Livingston nh 22:38:30 GMT - 11/15/2017
Just for the record - the 10 yrs 1976 to 1985 had the biggest annual percentage in interest expense (only one yr single digit % and 3 over 20%)
The past 10 don't come close BUT if you think 2 yr Treasurys are going back to 15% then the next 10 yrs might be a problem
PAR19:50:01 GMT - 11/15/2017
Difficult to argue that US debt has been used to invest in infrastructure and productivity improvement . Has mostly been used to pay the costs of fighting perpetual wars ?
Paris ib 19:48:37 GMT - 11/15/2017
Livingston you must have missed it: Obama DOUBLED the outstanding Government debt in the U.S., and that's just the past 8 years. Before that there was W and his wars and Cheney and war spending a go go. In addition in the meantime the world turned off the money taps. Now the debt is yours, it's huge and the cost of rolling it is RISING. But hey who cares...
PAR19:42:38 GMT - 11/15/2017
Trump .King of debt , planning to replace tax colleection by issuing a few $ trillions of new debt . What' s wrong with that . Trump and his friends get rich ,die and leave the fortunes tax free to their heires . USA is left with $ 25 trillion of public debt .
Well done American oligarchs .
Livingston nh 18:41:46 GMT - 11/15/2017
11 years ago this week the yield curve was inverted and the 2yr was @ 4.80% -- 2%, no big deal
Israel Dil 17:22:51 GMT - 11/15/2017
after noting the debt delegation in Venezuela leaving with bags full with Venezuelan chocolates, you must agree that the nonchalant Belgians regarding their debt know that their Belgian chocolate should get a better deal.
Paris ib 16:52:18 GMT - 11/15/2017
JP there is debt and there is debt.
There is short term debt, which is subject to roll over problems, there is debt to finance consumption, which leaves you simply less well off in the future and there is debt to finance investment and productivity, which if done wisely can leave you better off in the future.
All this broad brush commentary on 'debt' is mostly just noise. You need to drill deeper. There can be a LOT wrong with the wrong kind of debt.
If you are a country with a large external debt which needs to be rolled over every 1-3 years then you as a country are in a very vulnerable position, particularly if you have a foreign policy approach which is not popular with the people who are kindly rolling over your debt.
Rising bond yields means: more sellers than buyers at currency prices.
PAR I have always maintained it is a prime pure shame to die with money in the bank. 40-50 years ago most europeans were scandalized at the american way of debt-financing of things (such as a house). In europe the method would be for newlyweds to live in a one room and would add on as cash financing would allow mindful of "When we hang the capitalists they will sell us the rope we use." - Stalin
Pray tell exactly WHAT IS wrong with indebtedness ?
Belgium combined debt . Government , companies and private person debt is 297% of GDP . Thank you Mario .
With low interest rates the only thing you can do is borrow , borrow and borrow . And that is what everybody is doing .
PAR16:30:41 GMT - 11/15/2017
Belgium combined debt . Government , companies and private person debt is 297% of GDP . Thank you Mario .
With low interest rates the only thing you can do is borrow , borrow and borrow . And that is what everybody is doing .
Paris ib 16:14:23 GMT - 11/15/2017
How long before the 2 year Treasury yields cracks 2 percent? Anyone care to guess?
Waiting for.... well everything to take a sharp turn for the worse in countries with high external debts (particularly where that debt is short term in nature and needs to be rolled over every 1-3 years), a chronic reliance on foreign capital and no longer term economic plan (which does not involve bombing, invading or otherwise plundering other countries). 2018 is gonna be interesting.
Israel Dil 16:21:25 GMT - 11/14/2017
jp - the Roy Moore effect... with some stupidity and madness dressing, in case you can't laugh with it. next >>> or stay around it and bite harder, ib hopefully released a good laugh about it
Mtl JP 16:16:41 GMT - 11/14/2017
Dil 15:59 is that a display of condescending, sexist , misogynistic attitude ?
Israel Dil 16:14:26 GMT - 11/14/2017
Blackrock chief stating that everyone in and around his/her 30's must have 100% of own capital in stocks. that doesn't need a rocket science from here, just patience.
wow ib hottie girl.... seems you moved to brain stimulating diet... well done girl :-)))
Livingston nh 15:56:59 GMT - 11/14/2017
some bond market indicators are forecasting a Fed easing in a year -- Treasury is favoring more s/t term issuance // keep in mind the Twin Deficit and "crowding out" monsters under the bed NEVER materialized
Paris ib 15:52:48 GMT - 11/14/2017
The only thing that matters is that the U.S. Government will now have to roll over its debt at a much higher funding cost than previously. 2 year yields are nudging 1.7 percent. THAT is gonna hurt. The debt is massive, it's growing and higher yields are NOT seeing money pour into the country. Everything else is just detail.
Paris ib 14:02:48 GMT - 10/06/2017
Good grief, two year yields at 1.52 percent. Rolling that massive American Government debt just gets more and more expensive.
For now the USD bulls are loving it but IMVHO mistaking a bond market SELL OFF for a bullish U.S. signal is a mistake in the medium term. It will work for the short term but be cautious, especially if you fall in love with the trend. gl gt
PAR10:31:07 GMT - 07/05/2017
Fed minutes to point at more rate hikes and a program to reduce the FED s balance sheet . Normalization of monetary policy is good .
If one looks at the expansion of all government deficits all over the world one can argue that it was fiscal policy and not monetary policy which lead to the recovery whatever central bankers may claim .
Paris ib 10:12:14 GMT - 07/05/2017
Getting out of Dodge.
2 year Treasury yields now at 1.41 percent and rising.
Paris ib 08:38:43 GMT - 06/28/2017
The 2 year U.S. Yield looks frozen at the moment.
They say in the JGB market nothing trades at all any more. The only actor in the market is the BoJ and the rest of the market is completely frozen out. Yields don't change. Nothing moves. I'm beginning to think that can happen in the States. Until the damn bursts. This is so bizarre.
The Police State made manifest. A world where the authorities control everything. Well trying to anyhow..... what a bunch of weirdos.
"Yields are rising in the States and I can think of no real reason why this medium term trend will reverse"
Paris ib 14:48:00 GMT - 06/27/2017
JP.... I love that 'It must stop'
An economic crisis is baked in. What we are watching for is how it develops. The print and forget moment in history is well past. Now it's time to deal with reality.
Mtl Jp 14:42:17 GMT - 06/27/2017
It must stop / reverse. If it won't Yellen and gang risk causing an economic crisis. Again.
Paris ib 14:39:22 GMT - 06/27/2017
1.40 IMVHO will be broken.... :-)
Paris ib 14:38:09 GMT - 06/27/2017
red I think the trend is your friend on this one. Yields are rising in the States and I can think of no real reason why this medium term trend will reverse. My only question: how far will this go? And how much damage will it do? For now.... that's the trend. The damage we will work out when we get to the apex, where ever that may be.
london red 14:23:47 GMT - 06/27/2017
1.40 to watch on the 2's
sup for euro 43/44/50 more by 11220
dc CB 14:19:09 GMT - 06/27/2017
Auctions this week.
Yest the 2 went off with the Highest Bid to Cover - 3.03 -- since Nov 2015...yielded 1.348% against WI 1.354% = 0.6 bps.
Today the 5s go off at the same time Yellen' speaks
Paris ib 14:08:05 GMT - 06/27/2017
2 year U.S. Treasury yields now nearly 1.38 percent and rising.
The cost of funding that enormous debt keeps rising, and the interest bill just gets added on to the debt. Debt spiral anyone?
Don't believe the spin, this is NOT USD positive, this is a big, big problem. And while the U.S. media insists on destroying any lingering confidence in the current U.S. administration it can only get worse.
USD negative. And the U.S. Treasury market is the biggest bubble of all.
Get your popcorn people, this is going to be amazing. gl gt
Paris ib 07:55:31 GMT - 06/13/2017
While America self-immolates the cost of funding that immense level of U.S. Government debt keeps rising. 2 year Treasury yields above 1.35 percent now. It's just a matter of time before they reach 1.4 percent. And at some point you get a debt spiral: the rising cost of funding adds considerably to the stock of existing debt (after all none of it ever gets actually PAID back - note to foreign holders of U.S. debt) and if the market really catches fright you get: Greece.
Trump has a PhD in debt management, so he better get onto this. Although the circus in Washington and in the U.S. Press is likely to make that difficult, if not impossible. It would appears that the people who lost the U.S. election don't care what happens to the U.S. as a whole. They are not the sort of people you can make a deal with or trust.
Good luck Donald, you are going to need it. USD positive? I don't think so.
The rising cost of funding the HUGE U.S. Government debt is WHAT is going to get ugly. I don't see a massive rush to fund the U.S. when the U.S. press is busy denigrating the sitting President and his entire administration. THAT is ugly. The funding mess will be UGLIER.
dc CB 18:13:05 GMT - 06/01/2017
What are you talking about.
this looks ugly?
Haifa ac 17:30:52 GMT - 06/01/2017
AHHHH the memories of the chalice:
Hawkins: I’ve got it! I’ve got it! The pellet with the poison’s in the vessel with the pestle; the chalice from the palace has the brew that is true! Right?
Griselda: Right, but there’s been a change. They broke the chalice from the palace.
Hawkins: They broke the chalice from the palace?!
Griselda: And replaced it with a flagon.
Hawkins: A flagon?
Griselda: With the figure of a dragon.
Hawkins: Flagon with a dragon.
Hawkins: But did you put the pellet with the poison in the vessel with the pestle?
Griselda: No! The pellet with the poison’s in the flagon with the dragon! The vessel with the pestle has the brew that is true!
Hawkins: The pellet with the poison’s in the flagon with the dragon; the vessel with the pestle has the brew that is true.
Griselda: Just remember that.
Paris ib 16:57:53 GMT - 06/01/2017
Trump's poisoned chalice... 2 year U.S. Treasury yields back above 1.3 percent. This is going to get ugly. The attack dogs keep going, undermining whatever international credibility the U.S. might still have had. Ugly stuff.
Meanwhile: everyone seems to agree that the EUR/USD needs to go higher. Not that the permabears have noticed.
"Both Trump and Merkel, moreover, say they want the Euro to strengthen against the US dollar."
looking at all that, I see money gods play monopoly in virtual reality and somehow the overwhelming majority is certain it's reality. Paper money pays interest over paper money. seems that is going to last forever, so why to bother about that?
Paris ib 13:33:45 GMT - 05/10/2017
Cost of funding the U.S. Government debt just keeps rising. 2 year bond yields now at 1.34 percent or thereabouts. This is the key market to keep an eye on. The pundits talk about how this cratering market is attracting funds - funds I guess that want to lose money on a falling asset. So speculative USD buying takes place but it's not real capital inflows. Remember that.
Livingston nh 11:45:19 GMT - 05/04/2017
ib- Rather than my normal RANT response to your concerns about the fiscal conditions in the US (a default on Treasurys?) and oft repeated demise of the USD my early morning brief included this short narrative in the FT LINK --- it doesn't include my favorite "Gov debt is just currency with a coupon" but does offer the following ..."Government debt isn’t supposed to be paid off! People buy sovereign bonds because they want to store wealth in something that does well when the rest of the economy does badly. One of the central problems of the past few decades has been the stubborn refusal of certain governments, including America’s, to accommodate this desire, suppressing real interest rates and encouraging the unscrupulous to create imperfect substitutes for safe debt. Rattner doesn’t seem to think banks should “pay off” their deposit obligations and liquidate themselves. So why should the government?" -- the article is timely for the current and much to be hoped for future state of fiscal policy (taxes) in the US -- perhaps even my argument that the FED's monetary policy has been tight because of the HOARDING of Treasurys
Paris ib 07:46:10 GMT - 05/04/2017
Meanwhile back on the farm.... U.S. bond yields are rising again. 2 year Treasuries back above 1.3 percent, not quite the peak seen in March but... the trend is your friend. And while all the pundits will tell you this means the USD is a buy (because you know if an asset is falling in price - and Treasuries are falling in price - then it's a buy.... EVENTUALLY) what it is really telling you is that the funding for U.S. Government debt is getting more expensive and that is a problem when you have a huge debt, a deficit and your rely on overseas funding.
In this environment the media is intent on trying to destroy confidence in the Trump Administration. Talk about an own goal.
Surreal how the ongoing bond market sell off is being ignored by the markets. At some point though higher interest rates will start showing up in the economic data. Wadda we got? 6 months? 3 months? till it starts impacting economic data.
2 year U.S. Treasury yields now 1.37 percent. Boom.
Mtl JP 15:32:11 GMT - 03/02/2017
dc CB lets see janet's FED gang dis-appoint the near certain market next.
Communication is one of the few "credibility assets" the FED has to peddle.
Mtl JP 15:23:54 GMT - 03/02/2017
nh 15:08 any janet-induced dip in the dollar is a BoD opp
Mtl JP 15:19:21 GMT - 03/02/2017
How out of touch are these people?
Exactly and precisely just the right amount so that you and I an get rich off them - their primary raison d'etre of their existence.
Latest example: Brainard. hallelu-yeaaahh!
Paris ib 15:13:17 GMT - 03/02/2017
The Fed is always surprised by the market reaction. How out of touch are these people?
Livingston nh 15:08:46 GMT - 03/02/2017
Seems that the Fed was surprised by the reaction to the Minutes last week -- on Tuesday b4 Minutes rates were higher than last Friday // Yellen may want to inject a bit of Uncertainty
Israel Dil 14:59:45 GMT - 03/02/2017
who's gonna fill the gap?
the masses left stocks 65% lower, they are not coming back when LePen is stripped of her immunity by the EU.
so doesn't MATTER how you look at it, you see the same, CRASH!
EU is dying while Sweden recalls mandatory army service for the youths (reading the small letters may assure that they are nuts) ;-)
dc CB 14:52:59 GMT - 03/02/2017
March hike odds now 90%
5ver went from 1.8 friday's close to 2.02 this morning
Paris ib 14:44:27 GMT - 03/02/2017
If the entire world starts hiking... what then?
"The ECB will reduce... quantitative easing from €80bn to €60bn a month from April, with purchases set to continue until the end ..year."
quite a move/change of heart since friday afternoon.
Paris ib 17:05:28 GMT - 03/01/2017
PAR negative rates are crazy, we know that. Just looking German Government bond rates still negative out to EIGHT years. Seriously. What will be interesting is the readjustment period. The impact will be different in different countries......
PAR17:03:13 GMT - 03/01/2017
If FED hikes ECB will have to follow and get rid of negative rates which will be a huge plus for European banks . Italian banks shooting up like NPL's don t exist .
In current environment ECB negative rates look crazy .
Paris ib 17:00:26 GMT - 03/01/2017
If the 10 year goes to 3 percent, which now seems possible, what then? When does the market 'care' about this?
Paris ib 16:56:46 GMT - 03/01/2017
Seems a bit exaggerated. Market is freaking out quietly.... too weird.
Livingston nh 16:48:26 GMT - 03/01/2017
2 yr is backing off (1.27) big moves Mon and Tues -- 10 yr same as it was first day of 2017 // it's nothing
PAR16:43:10 GMT - 03/01/2017
Fed speak . The " Dudley" rally in world bank shares .
Paris ib 16:12:44 GMT - 03/01/2017
Two year Treasury yields are hitting 1.3 percent. While the trend is your friend and all that, what is the news that would see this massive spike in U.S. yields today? What did I miss?
Paris ib 19:00:49 GMT - 09/01/2015
While stocks see ongoing weakness there has NOT been a commensurate increase in bond buying. 2 year Treasury yields are still above 0.70 percent and 3 year yields are above 1 percent. This is not good news. The U.S. rolls most of its debt in the 1 to 2 year area. And it has a lot of debt to roll. 4 trillion rolls every year. Higher yields at the short end go right to the bottom line. One more reason for Yellen NOT to hike in September. Though I note the ongoing USD bullish sentiment on this forum and in the press. The logic is flawed. The USD remains at risk.
Paris ib 19:07:25 GMT - 03/25/2015
U.S. Treasuries selling off even as the U.S. (and other) stock markets takes a hit. Not good news. The usual positive Yellen impact (post FOMC) on bonds is wearing off again. Same old, same old. All up bad news for the USD. What do we have? Bad economic data. A struggling stock market. A failure to rally on the bond market and a USD index which is coming off its multi-year high. Oh and then there is all this weird background geo-political stuff going on. Black swans line up.
Mtl JP 20:48:36 GMT - 03/06/2015
with stox off only approx 1.5-1.7%, still very very far from a Babson moment , also far from shellshock
Paris ib 20:39:57 GMT - 03/06/2015
The U.S. funds itself in the 2 to 3 year area of the yield curve, when it is not issuing paper of a year's duration or less. 2 year yields have tripled since early 2011. OK they are still low but what has happened to total U.S. government debt in that time? It has increased by over 30 percent. Taken together that is not good.
I really thought that the BLS would put out a poor number today, given all the layoff anncments that came during earning reports and the cut backs in the energy sector.
The next FMOC, coming in the 1st quarter QuadWitching week and the Spring Equinox ( for GANN traders) and APPL joining the DOW....should be one wild week.
Paris ib 20:29:02 GMT - 03/06/2015
JP I had a catholic education. I kinda like the idea of living in a functional society with happy people in it. Not shell shocked desperados. But hey that's just me. :-)
Mtl JP 20:18:54 GMT - 03/06/2015
ib 19:54 / what is ugly about "a collapse of bonds and stocks more or less at the same time" pray tell ? To me that sounds like that one multi-decade trade opportunity to get filthy rich. And something to get excited about - and if you are right , and I am right, and we both get filthy rich, we could combine our filth, buy a 747, u pilot and I serve the drinks as we plan our next destination.
What would you like in your juice ?
Paris ib 19:54:03 GMT - 03/06/2015
3 year Treasury yield at 1.14 percent and looking ugly. Stocks don't like it, neither will the economy. Failed policy all round. We could very well have a collapse of bonds and stocks more or less at the same time. After all the rally was across the board. Central Banks take a bow. You idiots.
Paris ib 13:46:29 GMT - 03/06/2015
Stocks are not liking this. At least in the U.S.
Paris ib 13:36:25 GMT - 03/06/2015
3 year Treasury yields hit 1.10% following the employment report. The talk is going to be monetary policy tightening with all the implications that has. DAX through the roof on the weaker Euro.... all those exports driving the German economy higher.
The Rouble is killing it. What's not to love? Very high short term rates, a trade surplus, almost no government debt and repatriation of funds held overseas.
Paris ib 08:42:55 GMT - 03/04/2015
Japanese bond yields continue to creep higher after reaching a record low at the start of the year. This yield creep in all Government bond markets needs to be monitored. Government bonds are in the largest bubble.... should it burst then head for the hills.
but so-far nothing serious enough to seriously affect the perpetrators's own, personal skin.
Paris ib 20:29:28 GMT - 03/03/2015
JP - we got sanctions and bombs and aiding and abetting coups, there are wars of aggression in Iraq, Afghanistan, Libya... the pivot to Asia.
Paris ib 20:27:52 GMT - 03/03/2015
Yeah? What's the new theory then? Print your own? Stuff your pockets with leaves? Bit too 'Hitchhikers Guide to the Galaxy' for me.
Livingston nh 20:23:59 GMT - 03/03/2015
Don't bang the drum about the need for foreign capital flows -- that is OLD econ theory // that is gold based (widgets like the EUR)
Centuries ago China grew w/o any foreign capital
The US grew with very high import tariffs
There are NO absolutes in economics - its not physics
Mtl JP 20:23:36 GMT - 03/03/2015
economic / trade / financial sanctions ... are those versions of "military aggression" ?
Paris ib 20:18:12 GMT - 03/03/2015
If government debt markets in the Western world enter a bear market then the possibility of fiscal stimulus is zero. Economic conditions deteriorate. Countries dependent on other people's money will be forced to pay a premium to borrow. I think the Anglo-Saxon model (external deficits in trade and capital) is entering a terminal phase, hence the military aggression: attempting to enforce a dying international regime.
Livingston nh 20:16:21 GMT - 03/03/2015
Government Bonds ARE currency with a coupon - so money = money // FIAT money is different than widget based money
Livingston nh 20:14:15 GMT - 03/03/2015
Currency and the theory of relativity - buttons in what country -- if interest rates are zero everywhere then all currencies are at parity? // size matters
Paris ib 20:10:23 GMT - 03/03/2015
All the other bubbles are dependent on the Government Bond market bubble. That goes, it all goes.
Paris ib 20:09:01 GMT - 03/03/2015
OK fine you could end up getting your 'money' back and being able to buy a couple of buttons with it. In the end purchasing power is what counts. We are entering crazy times with mad men in the control room. 3 year treasury yield at 1.08 percent and rising. And if you are looking for 'bubbles' the biggest and craziest bubble is in government debt.
Livingston nh 20:00:49 GMT - 03/03/2015
You are using 19th century widget based economics - fiat based debt will always be "paid back" - a USD bond will be redeemed in USD - its purchasing power is another story //CBs are encouraging inflation - as always buy fixed income at your peril
Paris ib 19:54:12 GMT - 03/03/2015
3 year U.S. Treasury yields now at 1.07 percent and rising. Japanese yields have been rising.... just as we were all getting comfortable with the idea of negative yields and an endless bull market in Government bonds (you know those instruments which represent a debt which can NEVER be paid back and just needs to be endlessly rolled over). German government bond yields are still negative out to six years... but yields are backing up.
Paris ib 17:14:58 GMT - 03/02/2015
The 'Yellen impact' lasted a couple of days and now it's back to selling U.S. Treasuries. This is more important than the 'narrative' would have you believe. Higher bond yields mean more seller than buyers on the U.S. Treasury market. I continue to believe that geopolitics plays a role here and IMVHO it means that aggressive U.S. geopolitical strategies are impacting the willingness of foreigners to stump up the cash to finance the U.S. Government. Which is the same as saying foreigners are not so keen holding USDs as an international reserve currency.
Paris ib 18:30:23 GMT - 02/26/2015
Bond yields creeping higher in the U.S., the Yellen impact is fading.
Paris ib 16:26:21 GMT - 02/26/2015
Negative bond yields in Germany and the prospect of QE has not helped the U.S. bond market any today. Neither has the rally in the USD.
GVI Forex john 14:48:31 GMT - 02/26/2015
I have the 10-yr bund at 0.277% -3.3bp.
ECB starts QE in March.
EURUSD starting to get set up?
Paris ib 14:35:42 GMT - 02/26/2015
3 years above 1 percent again. Is this even a tradeable market at this stage? What we have is ping pong.
Paris ib 14:11:24 GMT - 02/26/2015
3 year Treasury yields testing 1 percent again. It will be interesting to see if the 'Yellen effect' wears off shortly. What normally happens is that Yellen comes out and makes all these soothing noises, the bond market reacts for a few days and then it's back to off loading bonds in the run up to an expected policy tightening.
Paris ib 19:59:45 GMT - 02/20/2015
3 year yield back well above 1 percent. Now at 1.07 percent. Back to the avalanche?
Paris ib 10:32:19 GMT - 02/19/2015
3 year Treasury yields back above 1%.
GVI Forex Jay Meisler 20:37:35 GMT - 02/17/2015
Her name is Mester
gc sf 20:22:00 GMT - 02/17/2015
I'm just posting the comments I see - as I don't see them on GV since I logged in -- whether I agree with them or not.
Yesterday another Fed person - Female said same thing -- she expected a rise in June - ... I apologize I can't find her name right at this minute but if I find it will add that as well.
GVI Forex Jay Meisler 20:17:47 GMT - 02/17/2015
gc, remember the source. Plosser is an outgoing hawk on an FOMC filled mostly with doves.
GVI Forex john 20:16:05 GMT - 02/17/2015
Plosser is a prema-hawk and a non-voter.
HK RF@ 20:11:48 GMT - 02/17/2015
Plosser talks down bonds.
In this situation where people have no money, and US econ. struggles, doubt if any hike soon to come.
HK RF@ 20:09:17 GMT - 02/17/2015
Can we see the bond market avalanche, as another form of QE, or an all purpose liquidity injection, where investors will prefer to pull out their money out of declining bonds, and place it in business or S. market?
Still suspect the Fed may be behind it.
gc sf 20:06:03 GMT - 02/17/2015
here is another one ..
Fed should be really close to raising rates - Plosser
* 1.00-1.50% Fed funds rate at the end of 2015 is 'reasonable'
* FOMC's 'patient' language will be difficult to exit
* Fed should be really close to raising rates
gc sf 20:03:32 GMT - 02/17/2015
yesterday one of the Fed Speakers was saying that would be for a June Hike
GVI Forex john 19:34:56 GMT - 02/17/2015
Fair question. Given the dovish bias of all the voting members this year, I'm not sure why they would be selling.
Its conceivable that the central bank might want to nudge the normalization process, but they haven't even been discussing it.
GVI Forex Jay Meisler 19:34:21 GMT - 02/17/2015
RF. Highly doubtful.
HK RF@ 19:29:04 GMT - 02/17/2015
Is there any possibility the Fed is causing that avalanche by selling into the market?
GVI Forex john 19:21:16 GMT - 02/17/2015
Actually rising bond yields could be supportive of stocks if the markets feel they are higher on expectations of a stronger U.S. economy. They can't currently be concerned about inflation.
Personally I think U.S. data have been turning mixed, but the markets apparently are not seeing what I see.
GVI Forex john 19:05:26 GMT - 02/17/2015
RF- higher yields COULD mean that rates are simply "normalizing" to levels where traditionally they SHOULD be. There is a ton of paper out there that has to be absorbed. I don't see how the Fed makes money if it marks it s portfolio to market?
HK RF@ 18:55:21 GMT - 02/17/2015
Higher yields means that: The Fed, is going to make a big money if/when the S.Market will go into a correction sooner or later.
Bonds is where the exiting correction money will go.
Just don't believe for the time about coming interest rate rise.
Paris ib 18:41:14 GMT - 02/17/2015
JM - well you came to the right place. :-)
Paris ib 18:38:46 GMT - 02/17/2015
JM - weaker Treasury prices means selling in the Treasury market. Higher yields means that. There is no necessary correlation with the USD unless foreign sellers are involved.
NY JM 17:46:21 GMT - 02/17/2015
Ib weaker US treasuries does not necessarily mean selling dollars. It could also reflect reallocation of asset mix. I love a good debate.
Paris ib 16:52:38 GMT - 02/17/2015
Jay you can repeat the mantra but it doesn't make it so. Rising bond yields indicate selling of bonds. Now if this is related to a stronger economy, well and good. But you still have to identify how the stronger economy is going to impact the currency. Better trade performance? OK a positive. Not the case in the U.S., stronger demand if anything is likely to see a higher trade deficit (and it has). So capital inflows attracted to some investment opportunity? OK fine. Where are these potential capital inflows likely to go in this case if the U.S. is indeed seeing a better economic outlook?
Case in point today: weak data did not see bonds in the U.S. rally. So we have two negatives: weak data and selling on the bond market.
GVI Forex Jay Meisler 16:48:36 GMT - 02/17/2015
As I said if bond yields rise because of capital flight it is a negative for a currency. If they rise because of a better economy it is a positive.
Otherwise, if shorter term differentials widen then it is a positive.
Paris ib 16:18:43 GMT - 02/17/2015
kw - fixed income is the bond market. The U.S. bond market is seeing selling pressure. You buy, you lose money. Until yields start falling.
Paris ib 16:17:22 GMT - 02/17/2015
3 year U.S. yields haven't been this high since early 2011. The cost of refinancing all that debt is getting higher. This is not positive.
JM - Back to my Feb 12 reply to you (which you may have missed):
You don't buy an economy you buy a currency.
A currency can only rise because you have strong capital inflows or a positive trade performance. Speculators can push you around some but the longer term trends are determined by actual real money buying or selling a currency. No-one buys USDs because the bond market is on the slide. And if a stronger economy is likely to encourage capital inflows then you have to identify where those inflows are likely to go. Stocks? Real Estate?..... So the bond market slide remains a negative and you have to find the positive story. Which I haven't at this stage.
Paris ib 08:57:40 GMT - 02/12/2015
NY JM 17:26 GMT February 11, 2015
Bond Market Avalanche: Reply
ib not unless it reflects a stronger economy and expectations of rate hikes.
I had a think about this. I remain of the view that expectations of a stronger economy and rate hikes are NOT likely to do more than encourage speculative plays. Unless the U.S. moves rates to say 3 percent at the short end (and really murders the bond market) I don't see 'expectations of a strong economy' as USD bullish per se. You don't buy an economy you buy a currency. A currency can only rise because you have strong capital inflows or a positive trade performance. Speculators can push you around some but the longer term trends are determined by actual real money buying or selling a currency. No-one buys USDs because the bond market is on the slide. And if a stronger economy is likely to encourage capital inflows then you have to identify where those inflows are likely to go. Stocks? Real Estate?..... So the bond market slide remains a negative and you have to find the positive story. Which I haven't at this stage.
NY JM 18:16:33 GMT - 02/11/2015
Fed. Is never going to sell its bonds, only let them roll off IMHO
Livingston nh 17:58:42 GMT - 02/11/2015
What lurks beneath? -- SPX just broke below the 15 min 21ma that it walked up all morning -- yesterday's opening gap at 2045 and depending on your crayon's thickness last week's gap ~ 2040 was either filled or not // the 10 yr auction has built in fair concession over the past few days so now we see if it tails -- there has been little comparable movement in the 2 yr as the debate over the Fed move wanders off into Wonderland // flight to safety may govern the treasurys (Ukraine and Greece tape bombs) for a few days but the BIG deal remains ECB QE next month and the Fed (esp. Yellen to Congress) as the Tea Leaf readers pounce
The Fed Balance Sheet is so top heavy over 10 yrs that it may panic as it tries (needs) to buy more short paper - it may need to go back into the commercial paper business if it continues with its "do-gooder" regs // surprising that some Fed folks don't get the movement in 10 yrs given the lock-up of long treasurys in the vault -- think about inversion if they panic before they pushed part of their portfolio into the market
HK RF@ 17:28:57 GMT - 02/11/2015
Nice Bond-yields a place to go when/if the St.Mkt will be hit.
NY JM 17:26:37 GMT - 02/11/2015
ib not unless it reflects a stronger economy and expectations of rate hikes.
Paris ib 17:11:24 GMT - 02/11/2015
A sell off on Treasuries is not supportive unless you take the view that it is OVER and Treasuries will now rally. Otherwise all you are doing is buying an asset that is going down in price. Which is not supportive. Capital inflows are not going to be attracted to a sliding market.
NY JM 17:07:51 GMT - 02/11/2015
Higher US yields (10 yr above 2%) supporting USD
Paris ib 15:43:42 GMT - 02/11/2015
red - I don't know if yields can break up through key levels yet. It could be yet another false move. My view is that the economy is weak and the 'risk', as always, lies in geopolitics and the flow of international funds. It seems to me that we have moved away from the day when bond yields just reflected domestic inflation and economic growth prospects. And there is so much geopolitical 'noise' around at the moment and so much to disrupt international capital flows that extreme caution is warranted. The U.S. bond market has failed to benefit from a stronger USD. That is not a good look. Something has to give.
london red 15:38:03 GMT - 02/11/2015
paris, march 10 resting on dec 16/2014 high. been below but not closed under. nxt marker for me. if they can stay under 128.75 then double top in play for 126 handle. purely tech, so something is bound to go wrong during, has done so for best part of 10 year bull mkt. maybe retail sales will come in weak, there has been some hinting to it. or maybe it will be that easy a ride.
Paris ib 15:31:40 GMT - 02/11/2015
It's Wednesday. The bond market avalanche started Friday in the States and the selling on the U.S. Treasury market has not abated.
dc CB 21:31:54 GMT - 02/06/2015
Brian williams is the current Jesus...the media show
No No he's such a nice guy.
and his daughter... a star on Girls...as a slut....but she was Great as Peter Pan in the Live NBC broadcast
is he a drinker? maybe he takes the "pipe"
But here below presented the editorial pic of the week.
CB i dont mind which way it goes, as long as it goes. as long as data continues as such, all relevant mkts will re-price in the hike (cos we priced it in then out lol) in their own way be in st spike term or lt strung out.
Paris ib 18:18:22 GMT - 02/06/2015
CB - I just think bonds are the canary in the coal mine, that's all. :-)
Paris ib 18:17:44 GMT - 02/06/2015
U.S. stocks and margin debt. This could be interesting. The powers-that-be now have nowhere to go but up with interest rates - monetary policy gets tigher from here - come what may, there is no more room for fiscal stimulus, global trade has pretty much died....
OK then the Dow will only be UP 800pts on the week.
geeeshh you guys are never satisfied.:))
Paris ib 18:13:50 GMT - 02/06/2015
red - and then? Is it on to sell the rally across the board in global stock markets? European markets look to have topped. Hard to say on the Nikkei - a possible. And if the U.S. turns over we have a full house.
london red 18:12:02 GMT - 02/06/2015
yep march 10 done double top neck with some big downside now (2 figs) and st looks like it has an appointment with dec of last yr high, thats still half a point lower. stocks have held up surprising well but looks like hammer approaches into the close.
Paris ib 18:07:28 GMT - 02/06/2015
Went out, came back... the avalanche gets worse. Snowflake theory of financial markets....
dc CB 16:49:36 GMT - 02/06/2015
looking like a 1000pt Dow for the week. Yen is leading the way to Nirvana
think what CNBC would be like right now if this was a NEG 1000pt week.
Paris ib 16:18:21 GMT - 02/06/2015
CB - if they can get away with stealth QE I don't suppose they care what rate it goes off at.
dc CB 16:17:13 GMT - 02/06/2015
Weds 10Y auction may well go off at more than 2%
Paris ib 16:11:28 GMT - 02/06/2015
Those NFP numbers certainly triggered an avalanche in the U.S. Treasury market. I guess they figure the main game is keeping the USD bid and they can come in and support bonds at a later date (QE by stealth of Belgium or whatever works). Still it looks like a bit of dangerous game to me. 2 and 3 year bond yields are getting murdered. If they ever do hike (I think they talk and talk and talk and delay the evil day) then the U.S. Treasury market is doomed.
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