L,U or V RECOVERY? Some snippets from jobs data suggest if not an L, then a long based U shape as “a worrying trend emerging from the stacks of layoff notices filed by businesses in California, Florida, and New York, where service industries have been hammered by lockdown orders, as well as politically important swing states such as Michigan and Ohio, where key industries such as steel and autos already faced headwinds going into 2020. […] Read More
Bit of a knee jerk sell off occurring for TY this morning as fast money questions who will be buying the 3trillion us debt issuance this qtr. This view has instigated a wave of downside buying. Attached one contrary view from a long term macro below on the matter as they question this scenario and how it could lead to an opportunity to add to long TY/long USD positions. Move higher in yields due to […] Read More
(DJ) Fed says it will do everything it can to support economy facing continu… ——————————————————————————-This message may contain confidential or privileged information. If you are notthe intended recipient, please advise us immediately and delete this message.The unauthorised use, disclosure, distribution and/or copying of this e-mail orany information it contains is prohibited.This information is not, and should not be construed as, a recommendation,solicitation or offer to buy or sell any securities or related financialproducts. This information does not constitute investment advice, does notconstitute a personal recommendation and has been prepared without regard tothe individual financial circumstances, needs or objectives of persons whoreceive it. Fed says it will do everything it can to support economy facing continued public-health crisis2020-04-29 18:06:19.483 GMT By Greg Robb, MarketWatch (MarketWatch) — Central bank says coronavirus pandemic poses risks beyond theshort-term The Federal Reserve on Wednesday committed itself to use its full range oftools to help the economy facing considerable risk from the coronaviruspandemic. "The ongoing public health crisis […] Read More
The sustainability of the U.S. stock rally will be determined in part by consumers and their behavior after lockdowns. With price pressures squeezing households’ wallets, it may not be the case of a return to business-as-usual that equities are pricing. Earnings season has seen more than a quarter of S&P 500 reporting firms withdraw guidance, and consumer discretionary has far surpassed its sector peers in terms of abandoning profit outlooks. At the same time, earnings […] Read More
Bank views post FOMC: MS: An aggressive tone conveying no limits to policy easing, and corp credit facilities that will be operating “fairly soon” garnered a marginal easing in financial conditions. MS strategists exit 30y bond longs, 7s30s flatteners; remain long 5y BEIs, and bearish USD. MS expect an IOER hike eventually. • Given that the Fed is not looking to extend duration of its Treasury purchases as MS had expected, they think the risk/reward […] Read More
Bloomberg-Barclays Index Extensions US Tsys 0.14Y, MBS 0.03Y, EGBs 0.14Y, Gilts minus 0.04Y Large selling of equities into bonds and big duration extensions (ex Gilts) Month-end should be very supportive to bonds because equities have risen headlined by a 10% total return in the S&P 500 (producing selling in the rebalance) and index providers may revert to normal rules and produce some very large durations extensions. Remember that last month end, many providers of indices […] Read More
BANKS EU RATES Citigroup (strategists including Jamie Searle) Recommends buying 10-year gilts versus U.S. Treasuries to target a partial correction given BOE is likely to upsize bond buying by June, issuance is skewed toward the short-end and a rigid Brexit timetable make longer-dated U.K. bonds a good defensive option if there’s a Treasury-led sell-off HSBC (strategists including Chris Attfield) Recommends buying Spain 2s10s steepeners given short-end volatility is contained compared to BTPs, while Madrid is more likely […] Read More
Equities – Cant Live here TY looking a touch tired at these levels… While I’m not convinced of a collapse they could pull back short-term. We have been buying TYK0 139 puts, expire this Friday, currently 8/10 64ths BUND trades heavy.. first support 172.45 then more important double bottom around 172.20 area … before we open up the trendline support currently rising to 171.39 today.. Our case is “equities cant live here” … going to […] Read More
(BFW) Australia’s Blistering Bond Sales a Breeze Thanks to RBA ——————————————————————————-This message may contain confidential or privileged information. If you are notthe intended recipient, please advise us immediately and delete this message.The unauthorised use, disclosure, distribution and/or copying of this e-mail orany information it contains is prohibited.This information is not, and should not be construed as, a recommendation,solicitation or offer to buy or sell any securities or related financialproducts. This information does not constitute investment advice, does notconstitute a personal recommendation and has been prepared without regard tothe individual financial circumstances, needs or objectives of persons whoreceive it. Australia’s Blistering Bond Sales a Breeze Thanks to RBA2020-04-24 03:35:28.51 GMT By Garfield Reynolds (Bloomberg) — Australia is seeing some of the strongestdemand on record as it sells bonds at a record pace, backstoppedby the RBA’s purchases of debt from the secondary market. Moneymarkets have calmed enough for the central bank to trimpurchases in recent weeks, though Governor Lowe’s pledge toboost buying again if […] Read More
Neel Kashkari: Big US banks should raise $200bn in capital now Biggest lenders must prepare for the worst to survive deep economic downturn, writes Fed official https://www.ft.com/content/0b944cd4-7f01-11ea-b0fb-13524ae1056b The writer, president and chief executive of the Federal Reserve Bank of Minneapolis, oversaw the Troubled Asset Relief Program in 2008-09 Large banks are eager to be part of the solution to the coronavirus crisis. The most patriotic thing they could do today would […] Read More
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