The Wall Street Journal – Rising Mortgage Rates to Test Housing Market’s Strength For five years, mortgage rates have hovered around 50-year lows, a situation most economists believe will start to reverse if the Federal Reserve begins to raise interest rates later this year. Rates on 30-year conventional mortgages averaged 4% for the week ended… Continue reading How Will Housing Fare When Rates Rise?
MoneyBeat (WSJ Blog) – Meet the New Bond Index That Will Mirror the S&P 500 S&P Dow Jones Indices, the company that produces the S&P 500 stock index as well as myriad other benchmarks, is planning to launch a bond index – the S&P 500 Bond Index – in early July that will track the… Continue reading Introducing The S&P 500 Bond Index
Comment Today at 9 AM CT (10:00 AM ET, 7:00 AM PT, and 15:00 BST), Bianco Research, in conjunction with Arbor Research & Trading, will be hosting a webcast/teleconference moderated by Jim Bianco. Volatility and rate hikes will be the main topics of discussion. Central banks’ policies of zero interest rates, QE and now the… Continue reading On Rate Hikes And Volatility
<Click on chart for larger image> The Financial Times – Volatility is low and uncertainty never went away It is true that sometimes people feel more or less confident that they know what is coming (although they are frequently mistaken). At the moment, though, lots of measures suggest a reasonably high level of confidence. Growth… Continue reading Are Fed Watchers Reading A Different FOMC Statement Than Everyone Else?
The Wall Street Journal – Finra Hosts Closed-Door Meeting on Bond Trading Regulator examining how well bond market could respond to liquidity event When Peter Tchir was a bond trader for UBS AG on its giant trading floor in Stamford, Conn., in 2007, calls came in nonstop from clients seeking bonds from home builders like… Continue reading More On Liquidity
<Click on chart for larger image> The Financial Times – A bloated US Federal Reserve prepares to shape up There are at least two important issues at stake. The first is the question of what the Fed plans to do with the assets sitting on its balance sheet. Until the onset of the 2008 financial… Continue reading Reducing The Fed’s Balance Sheet
<Click on graphic for larger image> Bloomberg Business – The central bank’s interest-rate projections are moving closer to market expectations Federal Reserve policymakers are coming around to the bond market’s wisdom about where interest rates are headed. Futures traders have been signaling for more than a year that when the Fed begins raising target rates… Continue reading The Divergence Between Market & Fed Projections
Bloomberg.com – Three Hints Yellen Dropped That the Fed Might Not Raise Rates in September Janet Yellen’s press conference showed so-so confidence A close read of what Yellen emphasized yesterday suggests it would take sustained momentum to get the economy past the hurdles she still sees in its path. Let’s look at what she said: 1.… Continue reading Timing The First Rate Hike
<Click on graphic for larger image> The Financial Times – Investors flee US junk debt for second week For the second straight week, investors have retreated from US junk bonds. They pulled $2.9bn from mutual funds and exchange traded funds that are invested in US high-yield corporate bonds in the week ended June 17, according… Continue reading Junk Bond Funds
<Click on graphic for larger image> Comment The following comes from our friend Ron Griess of The Chart Store: Range volatility is defined as: Period (13 and 26) week high minus period (13 and 26) week low divided by period (13 and 26) week low. There are 4,512 S&P weekly observations from 12/29/28 through 6/12/15.… Continue reading Measuring How Quiet The Stock Market Has Been
<Click on graphic for larger image> Bloomberg.com – Yuan’s Peg-Like Stability Makes China Hottest Asian Carry Trade CHART 1. The yuan in Shanghai has barely moved against the dollar in the past three months. Its three-month implied volatility slumped to 1.19 percent this week, the lowest level since February 2014. The range has been almost… Continue reading The Yuan Carry Trade