NFIB; 3yr liquidity event...
First off, in my earlier thoughts, I neglected to mention today’s sole economic data point — NFIB — and I’ll simply offer a link through TO THE REPORT and let those highly paid f’casters and economic guess-timators tell you how many hikes, level of QT to expect and how Treasury issuance will / won’t be impacted by IT …
I will offer a couple things readily available on the intertubes from some who’ve already economically work-benched the data for us,
Then there was THIS TWEET by another fan fav,
@pearkes
NFIB compensation goes parabolic put comp plans down sharply.
Now while those have little to NO PERCIEVED impact on this afternoons liquidity event (aka 3yr auction), I thought I’d at least to mention …
3yy YTD an impressive march higher and momentum (slow stochastics, bottom) suggest to ME a pause of some sort (or, heaven forbid a RALLY back down?) may be at hand. For somewhat MORE and from best in biz (a large Canadian operation which doesn’t involve trucks)
We’ve been impressed with the extent of the bearishness in the front-end of the curve as investors continue to price in rate hikes and push yields higher. This leaves today’s 3-year auction as the cheapest since January 2020, and the fact that last month’s auction stopped through by the largest amount since June 2019 at yields that were 30 bp lower bodes well for dip buying today. Not solely on an outright basis, but also a relative value one, the 2s/3s/5s cash butterfly has cheapened steadily throughout February and this should drive some additional demand upside. Last month it was encouraging to see the greatest allocation to foreign investors since August 2017, and we’ll be watching the indirect bidding statistics this afternoon for an indication of a repeat performance as the global monetary policy backdrop is refined further. On net, we’re constructive on this afternoon’s supply and will exit our 2s/3s steepener at the auction.
Not EVERYONE is as optimistic and with 10s, 30s tomorrow and the next day, well, for very good reason. Example,
@Altheaspinozzi
Bidding metrics at today's 3y UST auction are in focus. Low demand could trigger a selloff ahead of tomorrow's 10y USTs sale, pushing yields to test the pivotal 2% level As yields in the EU area rise, the convenience for foreign investors to buy USTs diminishes @saxomarketcall
Noted and this differing of opinions IS what makes markets. Perhaps a bit more of a selloff and yields up TO / ABOVE magical 2% 10yy will attract those near and far? Build it and they will come? Tune in about 1pm for this afternoons liquidity event results and finally, in as far as THE source of many / most global bond market drama past few days, this one from Investing.com sums it up,