The FOMC concludes its two-day meeting later today. Rates on the short end of the yield curve are behaving but the long end is perking up. This is taking place at a time when foreigners are aggressively selling treasury notes … Continued
Last week, Fed officials threw cold water on incipient taper talk, making it clear they would continue to purchase treasury securities. This followed a backup this month in rates in the long end of the treasury yield curve, with the … Continued
It is probably not coincidental that US stocks and Treasury yields peaked together early October. The 10-year rate is right near support and has room to rally near term. This should bode well for equity bulls who last week put … Continued
If the Fed moves in September and December, the fed funds rate will be in excess of core inflation. In a leveraged economy, that should begin to bite. The FOMC dot plot expects three more hikes next year. This is … Continued
Here is a brief review of period-over-period change in short interest in the July 2-13 period in nine S&P 500 sectors. XLB (SPDR materials ETF) After defending support at $57-plus late June, XLB ($58.72) subsequently rallied past both 50- and … Continued
On the weekly chart, SPY remains grossly overbought, but near term there is room to rally – duration and magnitude notwithstanding. Options can help. US core PCE (personal consumption expenditures) increased 1.96 percent year-over-year in May – essentially two percent. … Continued
Following futures positions of non-commercials are as of June 26, 2018. 10-year note: Currently net short 355.3k, down 4.1k. Core PCE – the Fed’s favorite measure of consumer inflation – rose 1.96 percent year-over-year in May. This is as good … Continued
Ten-year Treasury yields rallied last week to right underneath the top end of a three-decade-old channel. A breakout has to wait for now. The 13-basis-point jump last week was big, and probably took many by surprise. At one point, yields … Continued
Once again, XLF (SPDR financial ETF) has been denied at resistance that goes back a decade. In December 2015, for the first time since July 2006, the Fed raised the fed funds rate. It was a 25-basis-point increase to a … Continued
After having left the fed funds rate near zero for seven long years, the Fed seemingly has shifted to a tightening bias. In agreement, non-commercials in eurodollar futures are aggressively betting that rates are headed higher. Are they right? Since … Continued