A few UST market observations
Labor Day (post NFP where bad news = good), liquidity events (auctions) and China 'flation
I’ve not ‘posted’ here in awhile and will remain largely ‘outta pocket’ due to personal residence transitional phase. Here are a few thoughts (LINKS) put forth in wake of NFP MISS.
Labor Day (9/6th): HERE are a few observations to consider as you you enjoy today's Labor Day holiday an the summer comes to an (unofficial)close. In TO the week ahead, I'd expect market conditions to remain 'impaired' due to the beginning of Rosh Hashanah this evening. Shanaha Tova to all who celebrate. May the upcoming year be filled with only good things. Even for bond bulls / bears who BOTH remain largely underwhelmed and dissatisfied at the moment.
> 30yy weekly BEARISH setup, levels
> 10s to 1% before 1.60. Why? (CitiFX shows 2010 best analog, NOT 2013)
> When bad news is good news -Blokland on NFP notes, "...growth rolling over has been accompanied by struggling equity markets"
> SEASONALS: scary for stocks (DB defends bearish/steepening bias)
> Stagflation: hey, BARRONS wrote about it so it's gone mainstream...
> EPB Macro NFP RECAP: Fed may HAVE to retract recent hawk talk and as Eric concludes, "...The slowdown in economic activity is broad-based, meaning it has reached all corners of the economy, from production to employment to consumption and income."
AND MORE ... On TAPER impact on UST trading LIQUIDITY, the BELLY, Tsy auction STRESSES and surprises during pandemic (DALLAS FED research) and I conclude with some 3yy, 10yy and 30yy LEVELS and some visuals along with increasing SPEC SHORT MOST Ultras in a year. Specs turn from long to SHORT and BOTH of these should prove helpful into this weeks supply…
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(9/7th): A few observations. Good morning. HERE are a few UPDATED observations including yesterday's NFP recap, bearish 30yy levels / technicals offset by some bullish (10s TO 1% before 1.60% -CitiFX) which was sent out yesterday.
I've added some of the GOOD (Chinese data) NEWS and some supply related math ($120b UST + $45b corp this week = X (where the markets will strive / struggle to solve for X this week)).
There are some who prefer buying DIPS (BMO) and others taking GDP f'casts lower (GS taking heat of MSs Zentner) and some INCREASED S&P target (Barclays now tgts 4600).
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(9/8th): A few considerations ahead of this afternoons 10yr auction. HERE are a few observations, LEVELS to help as you circumnavigate rates ahead of this afternoons liquidity event.
> 1.38 -- triple tops or bottoms (or both)? Ascending triangles, cloud 'analysis'
> hawkish = BULLard 'ish (FT)
> 10s attractive on 5s30s 'fly (BMO) w/reminder of last month's RECORD DEMAND
> 10s cheap vs Global AGG, specs flipped back to short (so pain trade set to continue)
Meanwhile, MS, Citi reducing US equity weightings, outlooks {NSN QZ46KTDWRGG2 <GO>}
Mortgage demand falls to lowest in two months as rates stagnate (CNBC)
Evergrande Dollar Bonds Fall After Suspended Loan Payment Report {NSN QZ40YWT0AFB4 <GO>}
Have at IT and a great start. Something BIGGER is coming (hopefully this time tomorrow).Let me know however I can help.
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(9/9th): Chinese 'flation data MIXED; liquidity events, ECB to SepTAPER? Bostic … Here are a few things to consider ahead of this mornings data, ECB confab and this afternoon's liquidity event. First UP, THE ECB h'line which we'll talk about until clarified at the press conference, ECB Sets Moderately Lower Pace for Pandemic Bond Program (derived from statement HERE)and lets HOPE that ECB+Claims = concession
30yy LEVELS, who's been buying and global RV
ULTRAS as a guide (note spec shortest in a year) and haters gonna KEEP hating
JOLTS RoC perhaps less than meets eye (GDP, QUITS?)
Used car price DISINFLATIONcontinues; Consumer Credit rolled over
China August CPI 0.8% vs 1.0% est, PPI 9.5% vs 9.0% est (Delta / WEAK FOOD prices)
Bostic: Taper door (still)OPEN this year (WSJ)
Have a look and a good start. Something bigger inboxed tomorrow.