On December 26, 2018, the US Treasury sold off $41 billion in 5-year notes. “Only” $85.8 billion in bids were submitted, weakening the widely watched bid-to-cover ratio to a chatty 2.09. The prior sale of 5s had yielded a bid-to-cover of 2.495, nearly $100 billion in bids for $40 billion on offer, so something was clearly up. Had it been [...]
Since we’re still on the topic of Treasury auctions, here’s another one to take a closer look at. Yesterday, Treasury sold $18 billion in 5-year TIPS – the inflation protected security (91282CCA7) – and though there were plenty of bids they came in at prices somewhat out of whack with the secondary market. This left two-thirds of the offering to [...]
The Australians are doing quite well, at least according to more recent data. A few hiccups hear and there, the economy Down Under has been riding high(er) on the Chinese rebound and the potential end to the pandemic. Earlier today, National Australia Bank’s survey of the first quarter business environment was thoroughly positive. At an index value of +17, this [...]
Then-President Trump was eager to talk in May 2017. Having been elected in 2016 by giving voice to what he called the “fake” unemployment rate on the campaign trail, and therefore mobilizing millions of the disaffected uncounted by that official ratio’s official definitions, it was enough to put him just barely over the top. To continue with the agenda, to [...]
With government cash being shoveled into personal and corporate bank accounts, US consumers have reported that they are being more optimistic about the state of the economy. Before that, they went on a spending binge as stated unequivocally by historic retail sales figures. Why, then, so much higher spending than improved happiness and certainty while going about it?The University of [...]
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). Even nearer-in inflation expectations have rounded off at their current [...]
The sound of economic sizzle finally within earshot, though perhaps nearly a year too late. PMI’s for the month of March 2021 were of the sort which should have come about in May and June 2020. The “V”-shaped recovery was much talked about at that earlier time, though in PMI terms (as well as regular “hard” data) the numbers fell [...]
It really is about abnormality. What I mean by that is, contrary to popular imagination fed by the Fed and other central banks, ever since 2008 the inflation paradigm has changed. The first global financial crisis (GFC1) has proven time and again how it wasn’t a one-off, and since it was a monetary breakdown (global dollar shortage) that’s been permanent [...]
There is precedence for this, though not to this extent; it has reached a record. And when it happened before, oil prices were right in the middle of it, too. The 5-year TIPS breakeven rate has surged to equal its highest in a very long time. Considered by many evidence for an inflationary breakout – these are inflation breakevens, after [...]
All the signs were there, starting with the fact that the Fed and ECB together had supposedly the flooded the world with digital money yet a palpable “something” was really off. Ben Bernanke’s central bank had unleashed both ZIRP and QE, the latter of which had finished up a couple months before. In Europe, Jean Claude-Trichet’s outfit was “highly accommodative” [...]
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