CREDIT RISK TRANSFER (CRT) BONDS THE NEW “BIG THING” FOR BOND YIELDS Floating Rate, Credit Risk Transfer (CRT) Bonds among best-performing debt of year (>10% v 7.2% HY & 5.9% IG), Fannie Mae and Freddie Mac said they probably will sell around $13 billion of credit-risk transfer securities in their main programs in 2018, Planned tax […]
IMF WARNS: EM DEBT NEAR POTENTIAL TIPPING POINT DUE TO SIZE OF LOOMING ROLLOVERS Tighter policy to sap funding pool for emerging nations Half of total external debt stock of EM issuers due by 2022 — SOURCE: 12-19-17 Bloomberg – “IMF Warns One of Most Crowded Bond Trades Near Tipping Point” — It’s one of […]
UST SUPPLY ABOUT TO NEARLY DOUBLE – YIELDS INCREASING DEPENDENT ON FOREIGN DEMAND — SOURCE: 12-19-17 Bloomberg – “U.S. Treasury Sales Are About to Double 2018. Who’s Buying?” — Onus may shift to price-sensitive investors like hedge funds If central banks step back, that could mean higher yields With the U.S. about to sell the most debt […]
THE BOND MARKET IS NOT BEING FOOLED BY “2017 TRUMP CROSS CURRENTS” Long Term US Treasury Yields have been is an unrelenting downward trend since Paul Volcker was Fed Chairman in the early ’80’s. This trend is not about to be reversed because there is simply no other solution to the US debt problem. The Federal […]
“Head And Shoulders” Showing In Many Treasury Charts In his latest slidepack, BofA’s chief technician Paul Ciana sees nothing but head & shoulder reversal patterns in virtually every currency pair and rate chart: i.e., the unwind of “Trump trade.” As he writes in a just released note, “many US dollar and euro crosses, US rates, US […]
Another Reason Not To Sell Bonds…Yet As I penned last weekend: “If the market corrects, OR the economy hits a speed bump, OR something happens in the Eurozone, OR…OR…OR…the covering of short positions in bonds will cause an extremely fast drop in yields. Sure, anything can happen. If yields on the 10-year Treasury break above 3% it […]
Another Reason Not To Sell Bonds…Yet As I penned last weekend: “If the market corrects, OR the economy hits a speed bump, OR something happens in the Eurozone, OR…OR…OR…the covering of short positions in bonds will cause an extremely fast drop in yields. Sure, anything can happen. If yields on the 10-year Treasury break above 3% it […]
“War of Words” Between Fed and Trump Administration Is Now Underway! USD DOWN > BONDS UP > YIELD DOWN (Cheaper Dollar Means Bonds Cost More in $$ and the Yield is Less) WAR OF WORDS BEGINS WEAKENS $$:Trump (WSJ Interview) and Mnuchin (Confirmation Testimony) Indicate they fell Dollar is PRESENTLY too high. STRENGTHENS $$: Yellen […]
