Comment Our own models indicate changes in central bank balance sheets explain 60+% of the variation in returns produced by the MSCI World and Barclays Global Aggregate Bond indices. The top panel in the chart below shows actual (gray) and estimated (green) 90-day rolling returns for the Barclays Global Aggregate Bond Index. The contribution of… Continue reading Balance Sheet and Sovereigns Post
Bloomberg – Fed Balance Sheet Shifts Into Limelight Absent Rate Hike Urgency Statement by FOMC many clarify timing of asset rolloff plans A larger source of uncertainty stems from the timing of when the Fed will start to shrink its $4.5 trillion holdings of mainly Treasuries and mortgage-related debt. Officials expect to begin the process this… Continue reading What to Expect on Fed’s Reinvestment Plan
Bloomberg – Volatility Gauges Tumble to New Lows Amid Complacency Fears Bank of America MOVE Index closes at an all-time low on Monday The markets are alive with the sound of ‘zzzzzz’ as the latest trading session marks yet another another record low for volatility gauges. Bank of America’s MOVE Index, which gauges volatility in the… Continue reading U.S. Treasuries Need a Wellness Check
Comment On Thursday, August 10, 2017 at 9 AM CT (10 AM ET, 7 AM PT and 15:00 BST) Bianco Research, in conjunction with Arbor Research & Trading, will be hosting a webcast/teleconference moderated by Jim Bianco. ECB president Mario Draghi speaks in Jackson Hole at the end of the month. The Fed is expected… Continue reading What Moves Rates
Bloomberg – Bond Market Pressures Build as Summer Drags On It won’t be long before the tectonic plates of bond supply, economic growth and inflation grind so hard that something breaks. After a sharp rise in the second half of 2016, volatility in the rates market has fallen to historic lows this summer, and yields… Continue reading Bubble Talk at Highest Since Taper Tantrum
MarketWatch – Dollar slides vs. Swiss franc as U.S.-North Korea discord prompts run to safety North Korea’s Kim Jong Un made explicit threat to strike a U.S. military base in Guam The dollar fell sharply against the Swiss franc Wednesday, with haven assets including Switzerland’s currency bid higher following a verbal clash between North Korea and… Continue reading Window For U.S. Dollar Rebound May Have Closed
The Atlantic – The Restaurant-Jobs Boom Is Ridiculous Donald Trump’s ideal economy is defined by brawn. He praises steelworkers, speaks wistfully of coal mining, and tweets boastfully about new manufacturing factories. But 200 days into his presidency, the most promising sector of the U.S. labor market isn’t steel-plating. It’s dinner-plating. Restaurant jobs are on fire… Continue reading Trump Can Thank Restaurants For Strong Jobs Numbers
MoneyBeat (WSJ Blog) – ‘So Many Ways to Say Boring’: Trading in a Popular ETF Slumped to the Lowest in a Decade How quiet is it out there? The most heavily trafficked security in the world on Monday barely got out of bed. Trading volume in the SPDR S&P 500 ETF, known by its ticker… Continue reading Try To Stay Awake Out There
The Wall Street Journal – Short Sellers, Options Traders Gear for More Volatility in Retail Stocks Short sellers and options traders are betting on more turbulence for the struggling American retail sector. U.S. retailers are shuttering stores at the fastest pace in more than a decade. A wave of bankruptcies has hit the group, and an exchange-traded fund… Continue reading More On Retail
Bloomberg View – Ben Emons: What Greenspan Gets Wrong — and Right — About Bubbles Corporate debt and German bunds may be the most at risk from a sell-off. In the 1970s, economists were confronted with the unlikely combination of faster inflation and a weak economy marked by high unemployment. The phenomenon became known as… Continue reading More On Greenspan’s Bubble Comments
Bloomberg View – Place Your Bets: When Will the U.S. Hit the Debt Ceiling? Mark your calendar for a crisis. You can see this one coming: The government will run out of cash on Sept. 29 and cannot borrow more money unless Congress raises the debt ceiling. This is a perennial crisis, and markets have a… Continue reading The Debt Ceiling
The Financial Times – Italy hopes for best economic confidence boost since crisis “Italy is the slumbering risk that could come out in 2018, “ says Bert Colijn, a senior eurozone economist at ING. “Now it doesn’t look like much is going on but markets can change their minds quickly.” The IMF itself warned last month… Continue reading The Italian Economy