A quick look at the speeds shows that most cohorts came in slower than expected. Add to that a crushing of vol (swaptions are down 7 normals on 10y tails today) and mortgages are ripping into the close. The big Fed holdings in FNM 2009 4.5s came in at 22 (we were...
It’s sooo nice to back in front of the screens after 2 plus weeks on the road. Today I want to discuss the BoJ decision from last night which is incredibly important for all securities markets. First, the link to the statement is here -...
Bill Dudley's speech on Friday all but announced the LSAP 2 program. "We have tools that can provide additional stimulus at costs that do not appear to be prohibitive. Thus, I conclude that further action is likely to be warranted unless the economic outlook evolves...
As I arrived at my hotel in Madrid late last night, there was a banner hanging above the entry. It said "The hotel staff will be on strike tomorrow for the first time in over 100 years. Not even during the Spanish Civil War did the hotel staff miss a day at work". It...
I have a couple more days in Europe before I head to the West coast. I have had some amazing discussions with clients on Europe, the US and China. The diversity of views is staggering and it’s clear that those in the "optimistic" camp have been very frustrated by the...
Suppose the Department of Defense had a mission – to take out the government of a rogue nation. For the purposes of this discussion we will call this nation Deflationstan. However, rather than go in with the full forces of the Army, Navy, Air Force and Marines, the...
Reading the statement from a cab in London, it appears 3 big changes. First, the inflation paragraph is much more dovish with the addition of a statement on inflation being below the level consistent with the mandate on price stability. Second, the final paragraph...
The fallout from Japanese intervention continues to be the primary driver of almost all price action. First of all positioning long YEN and CHF in much of the CTA world has created a lot of wound licking. I suspect speculative positions that were largely in “risk off”...
The geopolitical fallout from the Japanese intervention has yet to work itself through market psyche yet. The Japanese unilateral move to defend the YEN represents is a HUGE sea change for global capital markets. First and foremost the Chinese foray into YEN purchases...
There will be beaucoup YEN floating around in the system looking for a home!! Not only did the MoF sell YEN (finally), but thankfully the BOJ has coordinated the action to leave the YEN in the system and affect a monetary policy ease. This unsterilized intervention is...
There will be beaucoup YEN floating around in the system looking for a home!! Not only did the MoF sell YEN (finally), but thankfully the BOJ has coordinated the action to leave the YEN in the system and affect a monetary policy ease. This unsterilized intervention is NOT typical - cooperation by the fiscal and […]
