Yield Curve Headlines

  • BoJ Briefs Reuters: We'll Let 10-Year Yield Rise Above Zero Percent Target Around 1Q 2018

    It looks like BoJ Governor, Haruhiko Kuroda’s, minions are getting out and about to brief the financial news services that the biggest stimulator of all the central banks might reduce stimulus earlier than expected. The recipient of the unofficial briefings by BoJ officials is Reuters, which has this to say. The Bank of Japan is dropping subtle, yet intentional, hints that it could edge away from crisis-mode stimulus earlier than expected, through a future hike in its yield target, according to...

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  • The Silence Of The Bears

    Authored by Sven Henrich via NorthmanTrader.com, The silence of the bears is deafening. And who can blame them? The last 2 years have been absolutely brutal for any fans of price discovery, volatility and anything analytical mattering. Nothing matters. Be it divergences, valuations, earnings misses, slowing data, yield curve, equal weight, internals, catastrophes in nature, slowing loan growth, slowing auto sales, slowing real estate, retail apocalypse, debt levels, etc…I can drone on. Nothing...

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  • FOMC Signals Dovish Inflation Concerns, Warns "Sharp Reversal" In Markets Could Damage Economy

    With a dumping dollar and collapsing yield curve since November's FOMC, all eyes are on the Minutes for any signals of The Fed hawkishly ignoring inflation concerns but instead a few Fed officials opposed near-term hikes (on the basis of weak inflation). Furthermore, several Fed officials warned of the potential for bubbles, "in light of elevated asset valuations and low financial market volatility, several participants expressed concerns about a potential buildup of financial...

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  • Blain: "Stop Worrying About The Yield Curve, Something Much Worse Is Around The Corner"

    From Blain's Morning Porridge, Submitted by Bill Blain of Mint Partners Stop worrying about the US yield curve - its a distortion. Something much worse is around the corner.... A bit of a feeding frenzy in the new issue primary bond market as 21 deals hit the screen and went fairly well. With Thanksgiving tomorrow it’s likely the tail of the week will be very quiet, but our primary trading team reckon there is still plenty of momentum. We’re likely to see another two weeks of proper activity...

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  • Asian Stocks Smash Records; Dollar Slides As Crude Surges To July 2015 Highs

    Global shares hit another record high on Wednesday, propelled higher by what increasingly more call (ir)rational exuberance, and investors’ unflagging enthusiasm for tech stocks. That said, S&P futures are unchanged the morning before Thanksgiving (at least before the market open ramp), as are European stocks (Stoxx 600 is flat), despite the euphoria in the Asian session which saw the MSCI Asia Pac index hit a new all time high... ... as oil jumped, rising as much as $1.15 to $57.98/bbl,...

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  • 7 Reasons Why Stocks No Longer Care About Political Shocks, And 2 Why They Should

    From Nicholas Colas of DataTrek Research Why do global equity markets ignore political shocks like Brexit, President Trump’s election or the news that Angela Merkel failed to form a government in Germany? There are plenty of good reasons, actually, which we review below. News that German Chancellor Angela Merkel failed to form a new government was the big shock of the day. It is unclear if the country will have a minority coalition or call fresh snap elections. The New York Times quoted a Der...

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  • Yield Curve Crash Continues As Stocks Surge On Biggest Short-Squeeze In 11 Months

    Ignore gold, ignore earnings expectations, ignore the dollar, ignore the yield curve... and... German stocks sum it all up... Buy The F**king German Government Crisis... (even as EUR stays weaker) Record Highs all around in 'Murica... As once again the European Session (green boxes) cominated the ramp... As VIX was slammed back to a 9 handle... Here's a couple things though... The last 5 days have been quite a ride for 'shorts'... as "Most Shorted" stocks have soared over 6% - This...

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  • Is This The Real Reason Why The Treasury Curve Has Been Collapsing For A Month?

    A 'funny' thing happened a month ago. The Treasury yield curve suddenly started to collapse... despite gains in stocks and positive economi data surprises... the question is, why? Here's one possible reason why.. Originally submitted by GovTrader, TL/DR: Tax reform creates pension fund incentive to buy 30yr bonds NOW. Currently, the top corp tax rate in the US is 35%. It looks most likely that rate will drop to 20% when tax reform passes. If you are a corp with an underfunded pension fund, you...

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  • Novogratz Slams Dimon: Buy Bitcoin Because "We No Longer Trust Financial Institutions"

    It must be a sign that cryptocurrencies are becoming mainstream when Bloomberg TV launches the first of a six-part series on this comparatively recent innovation. Setting the scene, Bloomberg replayed comments made in interviews from what it described as “Wall Street sceptics”, including (not surprisingly) JPMorgan Chase’s Jamie Dimon, Neil Dwane of Allianz Global Investors and Severin Cabannes, SocGen’s Deputy CEO. The vignettes were peppered with sound bites like “index of money laundering”...

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  • Now We Know Why The US 30yr Treasury Curve Has Been Flattening Like A Pancake

    TL/DR: Tax reform creates pension fund incentive to buy 30yr bonds NOW. Currently, the top corp tax rate in the US is 35%. It looks most likely that rate will drop to 20% when tax reform passes. If you are a corp with an underfunded pension fund, you get a tax incentive to fund the pension THIS YEAR vs in the future when the corp tax rate drops to 20%. Why? Because contributions to the pension plan are tax deductible. You get a bigger tax deduction in 2017 then you will get in 2018 and...

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  • Biggest Short Squeeze In 11 Months Sends S&P 500 Surging Above 2,600

    Equity investors, corporate boards, and momo machines are panic-buying stocks this morning, sending the S&P 500 above 2600 for the first time ever... as the yield curve crashes to decade flats... VIX down, Stocks Up... While USDJPY momo is helping, stocks are quite decoupled... And so are bonds... But it's all about the squeeze... the biggest short squeeze since December...

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  • Yield Curve Carnage Continues

    The US Treasury yield curve collapse continued its unending path to inversion overnight with 2s10s plunging to sub-60bps and 5s30s hits a 65bps handle for the first time since Nov 2007. 2s10s has flattened for 3 days straight, 6 of the last 7 days, and 14 of the last 17 days to a 58bps handle... 5s30s has flattened 3 days straight, 6 of the last 7 days, and 16 of the last 19 days to a 65bps handle... As a reminder, it took The Fed hiking rates to 5.25% in the last cycle before investors...

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  • BofA's Apocalyptic Forecast: Stocks Flash Crash, Bond Bubble Bursts In H1 2018, War May Follow

    Having predicted back in July that the "most dangerous moment for markets will come in 3 or 4 months", i.e., now, BofA's Michael Hartnett was - in retrospect - wrong (unless of course the S&P plunges in the next few days). However, having stuck to his underlying logic - which was as sound then as it is now - Hartnett has not given up on his "bad cop" forecast (not to be mistaken with the S&P target to be unveiled shortly by BofA's equity team and which will probably be around 2,800), and...

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  • What Happened To Cash Flow Growth: The Red Flag In Q3 Earnings

    Listening to Wall Street analysts, or their financial press cheerleaders, one would be left with the impression that earnings season has been gangbusters, and the recent 2-3 quarters of growth are sure to lay the basis for a new golden age in which EPS rises at double-digit rates for years to come. There are just a few problems with this wildly incorrect conclusion. First, after a year of earnings recession and a year in which earnings went nowehere, 2017 is finally catching up to where analysts...

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  • The $2.4 Trillion Hidden “Fed Tax”

    The $2.4 Trillion Hidden “Fed Tax” Written by Peter Diekmeyer, Sprott Money News Jerome Powell’s support for the Federal Reserve’s low interest rate regime has long benefited investors, who reacted favorably to news that he would be Donald Trump’s nominee as its new chair. Economists argue that those “unconventional monetary policies” helped the US economy avert a major depression following the 2008 financial crisis and have...

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  • What German Political Turmoil? Global Markets BTFD, Don't Look Back

    US index futures are unchanged, having recovered virtually all overnight session losses alongside the EURUSD following Merkel's failure to form a government, while European shares rise despite Angela Merkel's failure to form a new government. In the span of just hours, the goalseeked "hot take" consensus was that Germany’s collapsed coalition talks aren’t expected be a deal breaker for European equities due to the "strength of the German economy." As we pointed out earlier, the euro reversed...

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  • FX Weekly Preview: EUR Darts Back To Uptrend, But Can It Last

    Submitted by Shant Movsesian and Rajan Dhall MSTA of fxdailyterminal.com The key move in the FX majors last week as the upturn in EUR/USD, where the first key area of support on the downside at 1.1500-1.1625 held well to generate the move up into the mid-upper 1.1800's.  In the previous week we also asked whether the USD correction was over, and some may assume that based on the key weighting in the USD index - it is.  Clearly the longer term outlook on Europe has been the driver of what is now...

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  • A key recession signal could have huge implications for Federal Reserve policy

    Thomson Reuters A shit in the bond market is giving investors and Fed officials pause about the economic outlook. The concern stems from earlier periods when long-term interest rates slip toward or even below their short-term counterparts, often signaling recessions. Philadelphia Fed President Patrick Harker says the central bank must avoid inverting the yield curve, or allowing 10-year Treasury yields to slip beneath two-year rates. The Federal Reserve’s plan to keep raising interest rates...

    Business Insider
  • Gold Gains As Stocks Slide, Yield Curve Crashes, & Dollar Dumps

    Economic Data continues to surprise to the upside (compared to what had been terrible expectations)...is this as good as it gets? But credit, the yield curve, and now stocks are not loving it... Small Caps were the only major index green today... The Dow and S&P 500- fell for the 2nd week in a row - something they haven't done for 3 months...Small Caps best on the week (followed by Nasdaq thanks to yesterday's panic buy)... Futures show the crazy moves this week better.. VIX was...

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  • Mueller Subpoena Spooks Dollar, Sends European Stocks, US Futures Lower

    Yesterday's torrid, broad-based rally looked set to continue overnight until early in the Japanese session, when the USD tumbled and dragged down with it the USDJPY, Nikkei, and US futures following a WSJ report that Robert Mueller had issued a subpoena to more than a dozen top Trump administration officials in mid October. And as traders sit at their desks on Friday, U.S. index futures point to a lower open as European stocks fall, struggling to follow Asian equities higher as the euro...

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  • 10 Reasons To Worry

    Via LPLResearch.com, One of the oldest market sayings is: “markets climb a wall of worry” - needless to say, it is sometimes good to be cautious. We listed some of our worries recently in What Might Scare Markets, but the action in the S&P 500 Index over the past year—and so far in November—has that list growing. Here are 10 reasons to worry (in no particular order): On a total return basis, the S&P 500 has been up 12 months in a row. The S&P 500 has only pulled back (from peak to...

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  • Goldman Reveals Its Top Trade Recommendations For 2018

    It's that time of the year again when with just a few weeks left in the year, Goldman unveils its top trade recommendations for the year ahead. And while Goldman's Top trades for 2016 was an abysmal disaster, with the bank getting stopped out with a loss on virtually all trade recos within weeks after the infamous China crash in early 2016, its 2017 "top trade" recos did far better. Which brings us to Thursday morning, when Goldman presented the first seven of its recommended Top Trades for 2018...

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  • Futures Jump, Global Stocks Rebound From Longest Losing Streak Of The Year

    After five consecutive daily losses on the MSCI world stock index and seven straight falls in Europe, there was finally a bounce, as investors returned to global equity markets in an optimistic mood on Thursday, sending US futures higher after several days of losses as global stocks rebounded following a Chinese commodity-driven rout.  The House is poised to vote, and pass, on tax legislation although what happens in the Senate remains unclear. European shares rebounded for the first time in...

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  • What Central Banks Have Done Is What They're Actually Good At

    Authored by Jeffrey Snider via Alhambra Investment Partners, As a natural progression from the analysis of one historical bond “bubble” to the latest, it’s statements like the one below that ironically help it continue. One primary manifestation of low Treasury rates is the deepening mistrust constantly fomented in markets by the media equivalent of the boy who cries recovery. That narrative “has ruffled a few feathers,” BMO Capital Markets strategists Ian Lyngen and Aaron Kohli wrote in a note...

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