On this side of “dollar” funding, risk continues to drain, steadily, but rather methodical about it. While China is taking most of the attention, deservedly, credit markets are not enthused about any of what has taken place. Again, I think that is more the yuan’s relation to the “dollar” than of anything else interpreted for or about the PBOC. It [...]
Given the outward expression of the “dollar” in various proxies, it is not surprising to see the inward development continue in the same pattern. Interbank rates and estimates are in many cases surging, particularly in the second half of July which matches the acceleration in the outward projections. This direction is nearly uniform, which confirms that the latest “dollar” problems [...]
Repo rates absolutely surged at month-end, LIBOR jumped a few more basis points and the eurodollar curve is bid almost everywhere in large chunks. Commodities continue to get smashed, especially crude oil, and currencies are devaluing in almost equally large portions. Even the treasury market is somewhat sporting the tell-tale collateral calls. In short, the “dollar” problems continue into this [...]
The “dollar” has ended the month much the way it started. Despite headlines suggesting the dollar is “down” today, it is very much proving to be disruptive across every proxy. Gold was down to $1,080 at the AM fix before rebounding. Commodities were sold broadly, with copper back near $2.359, down almost $0.02 at some parts of the futures curve; [...]
The “dollar” problems continued this morning as several proxies continued toward new lows. Copper fell to as low as $2.342 (July contract still) while crude is down close to $47 in the front months. The back end of the WTI curve, perhaps more importantly with respect to growth and fundamentals tied to the “dollar”, fell to new lows. The Brazilian [...]
Having past the fifteenth of the month, the first month in the new quarter, the repo “cycle” for the quarter end has completed. Repo rates have followed almost exactly the same pattern as three months earlier, pivoting on both the quarter end and the 15th each time. This is not just unusual, it shouldn’t happen. Compared with other quarter-end periods, [...]
Sticking with the history of the “dollar” of these past two years, economists and gold de-buggers had to have been at least initially encouraged by what they saw outwardly of interest rates and related financial factors in 2013. Almost as soon as “taper” became a mainstream concept, right at the start of that May, the treasury curve steepened and nominal [...]
At this point, no commentary is necessary though I will point out that repo volume in MBS (through DTCC) is very heavy of late. The 7-day average is the highest since March 4, 2013.
Repo rates made an almost perfect recapitulation, with MBS GC jumping to 28 bps and UST at 24.1 bps. Those July 15 fixes compare to MBS of 27.1 bps on April 15 and UST at 25.6 bps. The remarkable recurrence is all the more remarkable with figures now for the 15th. This might be as close to being able to [...]
With Greece settled and China moving away, for now at least, from the edge, it appears as if the “dollar” has settled back from the collateral calls of last week. That would make July 15 as seemingly as much of a dud as April 15 was, both in sharp contrast to October 15 and then January 15. That does not [...]
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