household net worth
sent Fri, Sep 24, 9:26 AM
Good morning. I wanted to take a moment and send along something I thought was interesting and risks getting lost in the fire hose of information being sprayed at us constantly. The following excerpt came from NatWEST UST market closing thoughts and relates specifically TO HHNW report yesterday @ noon. It relates directly TO UST market
... Finally, I’d be remiss if I didn’t mention some interesting conclusions from the Fed’s Z1 series, released earlier today. While the publication is too delayed to provide any current trading opportunities, it is useful in explaining what drove the Q2 rally in Treasuries. In short, a large part of the answer seems to have been buying from State and Local Governments. At $802bn net Treasury security purchases (annualized rate), it was the largest quarterly purchase amount in State and Local Gov’t history. Without going into too much detail, the excess buying seems to have been driven by an increase in transfers receipts and slightly higher taxes, increasing current receipts by almost double for Q2 compared to Q1 ($1.8tn vs $940bn, SAAR). Finally, other large sources of demand for USTs came from US banks and foreign buying. Interested readers could see here for the full release (data we discussed can be found on p22 and p57) ...
Food for thought as the Markets are aggressively UNCH, digesting largest yield move since March of 2020. Ring the bell, lick the wounds, get back TO it next week taking down (front-end) supply with both 2s and 5s on MONDAY (27th) and 7s on Tuesday (28th)...Then we start thinking about month and QUARTER END (extensions, rebalance, FI demand etc...) and performance concerns.