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Category Archives: Bond market sniffs recession

Note to Central Bankers (reprise)

Since my last warning of inconvenient reality beginning to happen (March 6th): The Fed has formally backed away from any more rate hikes this year, committed to ending QT by September, and threatened to expand the balance sheet again (more QE!). The ECB has announced a new (3rd) LTRO program and threatened to do more if need be. The PBoC has threatened to do […] Read the rest of this entry »

SPX & Tbond: pre-crash 2007 and now

These charts look similar, no?      

Look out below. (bond yields)

Other than bond fund managers, the rest of the investment industry nearly always forecasts bond yields heading higher (frequently as an incentive to buy their stock fund).  This job is made easier when yields are far below historic norms. Like now. However…. The US 5yr Tnote yield is 1.6%. You almost need a magnifying glass to see it.   Don’t think this yield can […] Read the rest of this entry »

No Mr. Bond. I expect you to die.

Given the first quarter has traditionally been a weak period for US Tbonds, you might have expected to see a slight rise in the long bond yield over the past few months (and a drop in price). Added to this usual seasonal weakness was the Fed reducing its ongoing long bond purchases (the QE3 taper). Hence most of the investment world has been saying […] Read the rest of this entry »

US Treasury market sniffs economic weakness

Despite today’s Fed Beige Book economic report showing a considerably improved U.S. economy, the Treasury market seems to be sniffing out a soft patch. You should also note that Q1 is a traditionally weak time of year for U.S. Treasurys. It’s usually party season for stocks and grumpy season for U.S. Treasurys. Hmmm. Methinks the bond market is sniffing out an economic soft patch […] Read the rest of this entry »

Bond sell-off overdone

I won’t comment on the sell-off in the junk bond space since junk bonds are heavily correlated with stocks.  However, the sell-off in the intermediate and long portion of the Treasury yield curve may be done for now. They were both very heavily oversold.  Judging from this chart, the US Tbond crash may have stopped a couple hours ago.   Maybe Tbond buyers are […] Read the rest of this entry »