FOMC Meets This Week, With Traders Betting Fed Funds Rate Will End 2023 At 3.63%, Vs Pre-SVB Expectations Of 5.38%

posted in: Credit, Economy, Equities, Technicals | 0

It is an FOMC week this week. Fed funds futures expect the one-year tightening cycle to terminate with a 25-basis-point hike this time; by June, the Fed is already expected to ease, with 2023 ending at 3.68 percent and 2024 … Continued

In The Face Of Fed’s Aggressive Buying Of Treasury Notes And Bonds And Foreigners’ Selling, 10-Year T-Yield Has Spring In Step

posted in: Credit, Economy, Technicals | 0

The 10-year continues to perk up, eyeing 1.4 percent. The strength is seen even though the Fed continues to aggressively buy these securities, although foreigners have been cutting exposure. In a leveraged economy, higher rates will translate to higher interest … Continued

Vaccine Or Not, Fed Chair Powell All But Promises Continued Easy Money

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Easy money is here to stay. That was pretty much the message Chair Powell delivered this week. The US economy is up to the gills in leverage. A sustained rise in interest rates will hurt. The Fed will try to … Continued

A Lot Has To Go Right For Tech Bulls Who Are Hoping For Short Squeeze Of Non-Commercials

posted in: Derivatives, Equities, Technicals | 0

Short squeeze of non-commercials in the futures market was a big factor behind the rally in the S&P 500 since mid-June. These traders have now targeted the Nasdaq 100. This has raised tech bulls’ hopes for a squeeze. But conditions … Continued

Foreigners Dumping Treasury Securities, Fed Buying Less – Should Status Quo Continue, Range Breakout Awaits 10-Year Yield

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Foreigners in the aggregate have been dumping Treasury notes and bonds. The Fed has been buying these securities, but less and less so. Given the soaring budget deficit and the need to issue new debt, the status quo cannot continue. … Continued

CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned

Following futures positions of non-commercials are as of August 4, 2020. 10-year note: Currently net long 92.1k, up 18.9k. The Fed’s balance sheet peaked in the week to June 10 at $7.17 trillion, up nearly $3 trillion in three months.  … Continued

Well-Behaved Inflation – And Outlook – Key To Fed’s Ultra Accommodative Monetary Policy

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June’s CPI was reported yesterday.  Inflation behaves well.  This makes the Fed’s job easier to continue to pour liquidity into the system.  All hell breaks loose once inflation refuses to cooperate – whenever that is. After three successive months of … Continued

CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned

Following futures positions of non-commercials are as of June 23, 2020. 10-year note: Currently net long 6.5k, up 17.4k. The Federal Reserve continued to reduce its assets this week.  Since rising to a record $7.17 trillion two weeks ago, the … Continued