Monday , June 17 2019
Home / Tag Archives: eurodollar futures

Tag Archives: eurodollar futures

Curve Sanity (Not What Most People Want To Hear or See)

Rate cuts will be insurance against whatever “trade wars” will throw at the global economy. That’s the current line from monetary officials in the US, anyway. The real question to ask is, how would they know? Starting with trade wars. Is that really what’s behind all this? The evolution of the curves told you everything you need to know, and tell you what to prepare for. It’s not just inversion that is noteworthy. They said all along there was no boom, even during the most maniacal parts of...

Read More »

Curve-sanity

There are those which are so very clear in their disingenuousness – to the point of overdoing it and becoming obviously absurd. In the increasingly desperate rush to downplay the headlong race to rate cuts, this one’s up there: Eurodollar futures traders, having decided that the Federal Reserve is likely to cut the fed funds target range at least twice over the next six months, are looking beyond the expected easing cycle in search of their next edge — the point at which rates will...

Read More »

Payrolls: Rate Cuts Not Of Their Choice

It’s never just one payroll report. The month-to-month changes in the Establishment Survey barely qualify as statistically significant, let alone meaningful. What that means is one good monthly headline is nothing to get excited about, just as one bad month shouldn’t get anyone too worked up. May 2019’s jobs report, however, isn’t in isolation. The headline for the Establishment Survey was +75k, well below expectations. On top of that, last month’s blowout (or what passes for one these days)...

Read More »

What Kind Of Risks/Mess Are We Looking At?

The fact that the mainstream isn’t taking this all very seriously isn’t anything new. But how serious are things really? That’s pretty much the only question anyone should be asking. What are the curves telling us about what’s now just over the horizon? I hesitate to use 2008 comparisons too often because many people immediately jump to extrapolations, especially in these more esoteric market indications. If you say something is like 2007 or 2008, people think you are saying we are on the...

Read More »

RIP: BOND ROUT!!!!

Reality has begun to dawn across Wall Street’s Economists. This year isn’t going to go the way everyone thought. Even as late as last November and December, the optimism was still sharp about how what was taking place at that moment would be nothing more than a transitory soft patch. They still listened to Jay Powell. In its projections for this year, 2019, JP Morgan’s strategists were not truly dissuaded. Given a Fed that continues to tighten against the backdrop of increasing Treasury...

Read More »

How Do You Get A September Rate Cut?

When the eurodollar futures curve first inverted a year ago in the wake of May 29, 2018, it was the market beginning to hedge against serious and rising risks of something that would force the Federal Reserve to turn around. When that might happen, or how many cuts would eventually follow, those were questions the immediate inversion couldn’t answer. All the curve said at that point was a serious chance Jay Powell was going to be forced into an involuntarily U-turn at some indeterminate...

Read More »

May 29: One Year Later, No Longer Risks

One year ago today, something huge broke inside the global monetary system. Exactly what, we may never know. I believe it was something to do with collateral and securities lending, the kinds of things that brought AIG to its knees in what doesn’t seem like all that long ago. In a rush, over several days, everyone around the world piled into the world’s safest, most liquid assets. In the immediate aftermath of that rush, other parts of the bond market responded in kind. Eurodollar futures,...

Read More »

Irony of Ironies; It’s Been Federal Funds Leading the Bond Yield Plunge The Whole Way

Tomorrow will be one year since the global monetary system broke. Or, for the sake of accuracy, broke again this for the fourth time. There had been warnings going all the way back to September 2017 about how all was not right in the realm of reserve currency. These would take on added importance at the outset of 2018, an outbreak of global liquidations that swept up even stock markets which were supposed to be giving central bankers their much-desired parade after a decade of struggle. In...

Read More »

PMI Plunge and Further Curve Distortion, A Steady Diet of Sour From Here On

Scarcely a day goes by without a flood of new articles in the financial media expressing shock and disbelief over Treasury yields. It’s not just that they are wrong, these say, it’s that they have to be wrong. What they are implying just isn’t compatible with the what “everyone” is expected to believe. Consumer sentiment is still high as are stocks (maybe a relationship?) Central bankers are still forecasting a second half rebound. Officials have even gone so far as to claim financial...

Read More »

Chart (Deluge) Of The Month

In Europe, the ECB’s minutes for its April 2019 meeting claimed: Financial market developments, which were typically more forward looking, were more upbeat. In the US, the Federal Reserve’s minutes for its April 2019 meeting claimed: Participants noted that even if global economic and financial conditions continued to improve, a patient approach would likely remain warranted, especially in an environment of continued moderate economic growth and muted inflation pressures. Let’s see if we can...

Read More »