115.2 US Treasury Bonds lose value each Autumn – Why?

———Ep 115.2 Summary———
Since 2011, the US Treasury 10-year bond peaks in value during the summer-to-autumn transition. Ignoring the economic context, whether positive or negative, bonds lose value. They lose value whether central banks are hawkish or dovish. Why? We offer five theories.

Macropiece Theater with Alistair Cooke (i.e. Emil Kalinowski) reading the latest essays, blog posts, speeches and excerpts from economics, geopolitics and more. Interesting people write interesting things, why not listen and hear what they have to say? You could do worse things with your time (i.e. Bloomberg, CNBC, et cetera). Recent readings include thoughts from George Friedman, Lyn Alden, Daniel Oliver, Michael Pettis, the Bank for International Settlements and yes, even Karl Marx.

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———Ep 115.2 Topics———

00:00 INTRO: US Treasury bonds yields have risen (price fell) by 38 basis points since August.
00:53 In 2019, UST yields rose 43 bps in 7 days, though the context was entirely different.
02:58 Emil reads poetry by Alexander Pushkin and ‘The Bond Market Bard’; is there a difference?
04:11 Seasonality is embedded in human affairs and, thus, in capital markets as well.
05:16 The 2014 reflationary ‘season’ was tremendously hopeful; the ‘bond rout’ was 29 bps.
07:18 The 2011 reflationary ‘season’ was gathering despair; the ‘bond rout’ was 70 bps.
08:21 The 2012 reflationary ‘season’ was on cusp of recession; the ‘bond rout’ was 43 bps.
10:11 Is the 2021 ‘bond rout’ a sign of economic reflation, or merely seasonal optimism?
15:53 Emil reads poetry by Robert Louis Stevenson and ‘The Bond Market Bard’.
17:17 These reflationary seasons are modest in the context of a true recovery.
18:52 Listeners offer explanations for the seasonality: quarter end bank activity.
21:00 Listeners offer explanations for the seasonality: agricultural cycle.
23:15 Listeners offer explanations for the seasonality: China, the Golden Week.
25:10 Listeners offer explanations for the seasonality: Treasury Bills, Notes & Bonds.

———Ep 115.2 References———

Maybe More Autumn Than Strictly August: https://bit.ly/3D01Ibt
Alhambra Investments Blog: https://bit.ly/2VIC2wWlin
RealClear Markets Essays: https://bit.ly/38tL5a7


Jeff Snider, Head of Global Investment Research for Alhambra Investments and Emil Kalinowski. Art by David Parkins, licensed to killustrate. Bassy James-Bond-style podcast intro/outro is “The New Black” by Mary Riddle found at Epidemic Sound.