Bonds

Not Abating, Not By A Longshot

By |2020-01-13T18:57:41-05:00January 13th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Since I advertised the release last week, here’s Mexico’s update to Industrial Production in November 2019. The level of production was estimated to have fallen by 1.8% from November 2018. It was up marginally on a seasonally-adjusted basis from its low in October. That doesn’t sound like much, -1.8%, but apart from recent months this would’ve been the third worst [...]

One Part Of The Bond Market Seems To Be Cooperating, But Not The Other

By |2020-01-03T18:28:12-05:00January 3rd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

While the world tries to digest the latest in geopolitics, as well as guess what could come next with them, on the topic of the economy the TIPS market registered a notable high yesterday. The 5-year breakeven rate, the difference between the “real” yield on the 5-year TIPS and the nominal yield for the 5-year US Treasury Note, was pulled [...]

Manufacturing Clears Up Bond Yields

By |2020-01-03T12:28:06-05:00January 3rd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Yesterday, IHS Markit reported that the manufacturing turnaround its data has been suggesting stalled. After its flash manufacturing PMI had fallen below 50 several times during last summer (only to be revised to slightly above 50 every time the complete survey results were tabulated), beginning in September 2019 the index staged a rebound jumping first to 51.1 in that month. [...]

The 2019 Tailwinds of Housing Describe the 2020 Headwinds of Economy

By |2019-12-30T16:37:45-05:00December 30th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s all somewhat confusing, once acclimated to this new paradigm. The highest in years can still be nearer the lowest in history. Given that apparent contradiction, it seems as if only one of those perspectives can apply. Which one you focus on often depends upon which way you already lean. Toward the end of last year, mortgage interest rates had [...]

The Public Knows, But Doesn’t Quite Realize, Another Crash Is Not The Worst Case

By |2019-12-27T16:47:57-05:00December 27th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Back at the end of April, the FOMC and its dozens of staff members gathered around to talk policy as those people always do every six weeks or so. The agenda was quite full, with Jay Powell having had to switch from rate hikes to a Fed “pause” the few months before and none of them really sure why. Economic [...]

Listen To China: Managed Decline, Not ‘Stimulus’

By |2019-12-26T13:00:55-05:00December 26th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

So much of the growth scare scenario relies upon China’s willingness to end it. By count of conventional Economics, there cannot be a case where a country like China just sits back and lets the economy fall into (further) decay. The argument will always devolve into some form of debate as to economic potential, but surely in a place like [...]

Everything Comes Down To Which Way The Dollar Is Leaning

By |2019-12-19T18:42:48-05:00December 19th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Is the global economy on the mend as everyone at least here in America is now assuming? For anyone else to attempt to answer that question, they might first have to figure out what went wrong in the first place. Most have simply assumed, and continue to assume, it has been fallout from the “trade wars.” That is a demonstrably [...]

TIC Rolling Over Would Mean Other Things Having Rolled Over

By |2019-12-16T19:06:27-05:00December 16th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the latest TIC estimates from the Treasury Department, foreign governments continued their heavy selling of US Treasuries. During the month of October 2019, the most recent data, the official sector disposed of more than $40 billion of those securities on net. It was the third straight month of substantial declines. Some observers try to link this kind of [...]

A Repo Deluge…of Necessary Data

By |2019-12-13T17:16:15-05:00December 13th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Just in time for more discussions about repo, the Federal Reserve delivers. Not in terms of the repo market, mind you, despite what you hear bandied about in the financial media the Fed doesn’t actually go there. Its repo operations are more RINO’s – repo in name only. No, what the US central bank actually contributes is more helpful data. [...]

Dealers’ Choice: Repo Facts Are Indeed Very Stubborn Things

By |2019-12-12T10:53:18-05:00December 11th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The biggest thing about September’s repo rumble wasn’t the double-digit GC rate(s), it was the timing. Beginning on the Monday the day before the FOMC’s regular policy meeting, Jay Powell couldn’t accomplish what he had set out to. The Fed’s Chairman wanted what was the second rate cut in the series to be a more placid one. A confirmation, of [...]