US T-Bonds facing multipe pressure.
- Better than expected global economic fundamental data
- Uncertainty about the next Fed Chair
- Fed / fed fund hike
- EZB tampering
- US TAX Reform
- Rising poitical uncertainty about Donald Trumps political future
After 9/11 2001, Subprime Crisis 2008 and Euro Crisis 2011 Centrals Banks blow up theire balance sheets to total more than 10.000 Billion US-Dollars. Dovish , QE´s and QQE´brought down Government Bond Yields vice versa lift T-Tond future prices to before unseen record highs. This trend is going to be reveresed now. After decades of bullmarkets US-Bonds entering right now into the beginnig of the first serious bearmarket since more than 20 years.
Yellen, Tax Reform And Draghi Rock The Markets
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management.
Between Fed-chair talk and the European Central Bank’s monetary policy announcement, it was an incredibly lively day in the foreign-exchange market, particularly when the ECB announced its QE change minutes before Politico reported that Yellen and Warsh are out of the Fed-chair race.
Republicans and Democrats in Congress are once again far apart on a government spending bill with just days to go before a partial shutdown. The next deadline is Jan. 19, and after Republican leaders met with President Donald Trump and cabinet officials over the weekend at Camp David there was no indication either side had budged on some of the policy disputes -- most prominently immigration -- that are tied up in the debate over funding. This week will be crucial in terms of reaching bipartisan deals, with the House and Senate needing the following week to vote whatever bill emerges from negotiations. The government has been running on autopilot since the fiscal year began Oct. 1, relying on a series of short-term measures that have kept the government running at last year’s funding levels. The tangle of other issues and the looming deadline makes yet another stopgap bill almost inevitable. A key test will be whether Democrats and Republicans can agree to add other items to the new stopgap, including a two-year agreement to raise budget caps, changes to immigration laws, funding for natural disasters, and health-care law revisions. Unlike the tax cuts enacted by the GOP in December, Republicans will need votes from Democrats, and significant differences remain in each area, particularly immigration.
“If the Democrats want to shut down the government because they can’t get amnesty for illegal immigrants, then they’re going to have to defend those actions to the American people,” Republican Senator Tom Cotton of Arkansas said Sunday on ABC’s “This Week” program.
Ten-year benchmark at highest since March has traders nervous
Looming supply glut from sovereign issuers damps sentiment
The 10-year U.S. Treasury yield climbed to the highest level in more than nine months, leading Bill Gross at Janus Henderson Group to declare a bond bear market just ahead of a deluge of sovereign debt sales.
The benchmark U.S. yield rose as much as six basis points to 2.54 percent, a level last seen in March, and the Treasury curve steepened the most in three weeks, as a looming glut of bond supply from the U.S., the U.K., Japan and Germany coincided with a surprise cut in purchases of long-dated Japanese government bonds by the Bank of Japan.
Even though central bank watchers said the BOJ’s actions aren’t interpreted as an imminent shift from ultra-accommodative policy by Japan’s monetary authority, it’s yet another sign of central banks stepping back from global bond markets -- just as the U.S. is about to sell the most debt in eight years. Add to that rising market expectations around inflation, and traders are starting to wager that Treasuries are about to break out of their tightest range in a half-century.
“We’re seeing a lot of overseas buyers who would come in every time we’d have a move close to these levels who aren’t coming in anymore,” said Michael Franzese, New York-based head of fixed-income trading at MCAP LLC, a broker-dealer. “That’s kind of scaring me a little bit. One eye is constantly on the exit button.”
The 10-year yield moved above 2.5 percent earlier Tuesday before paring its gain, and then resumed its upward shift in U.S. trading hours, making fresh highs. It was at 2.542 percent as of 12:16 p.m. in New York. The yield curve from two to 10 years steepened by 5.4 basis points, the most in over a year, to 57.43 basis points.
Treasury yields pare climb after better-than-expected 10-year note auction
Treasury buying picked up, pushing yields slightly lower, Wednesday afternoon following an auction of 10-year Treasury notes that drew healthier demand than had been expected. An unconfirmed report earlier in the session indicated that China may be considering halting or slowing Treasury purchases, which had cast a pall on the market, driving prices lower and yields higher, as investors appeared to shun U.S. assets. However, market participants described appetite for the 10-year notes as solid. "In the context of a wild and messy few days in interest rates, the 10 year note auction was good," wrote Peter Boockvar, chief investment officer for the Bleakley Advisory Group. The so-called bid-to-cover ratio for the auction stood at 2.69, the highest since 2016. Bid-to-cover ratios are a gauge of appetite for the debt sale, the number represents the proportion of bids received to bids accepted. Treasury auctions can be a litmus test of the state of the bond market. In recent trade, the 10-year Treasury note yield TMUBMUSD10Y, +0.25% was up at 2.569%, versus 2.542% on late Tuesday. The 2-year note yield TMUBMUSD02Y, +0.01% was slightly higher at 1.973%, from 1.968%. The 30-year bond yield TMUBMUSD30Y, +0.36% was at 2.910%, from 2.883%. https://www.marketwatch.com/story/treasu...
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