Treasuries break downward trend to rally on tech tumble–how long will last?

The plunge in U.S. stocks and in technology shares in particular have sent Treasury prices up and yields down, breaking the 20-basis point range that’s held since early February. The yield on the 10-year Treasury fell 8 basis points on Tuesday and is down another 2 basis points today to 2.76% as of 12:30 p.m. Bond traders are watching for any signs that we could be looking at a replay of 2017.

Cracking the nutty asset correlations of this market

Cracking the nutty asset correlations of this market

This morning provided a great example of how confusing and complicated correlations among asset classes are in the current market.Stocks rallied with the Standard & Poor’s 500 up 1.15% as of 11 a.m. New York time and the Dow Industrial Average ahead 1.7%. In some markets that would have been an all-clear signal after last week’s chaos and sent a message that buying risk assets was okay again.

10-year Treasury yields may be stuck in a range but the LIBOR interest rate benchmark keeps climbing steadily higher

10-year Treasury yields may be stuck in a range but the LIBOR interest rate benchmark keeps climbing steadily higher

Ahead of tomorrow’s interest rate announcement from the Federal Reserve, 10-year Treasury yields remain stuck just below 2.90%. The bond market just can’t seem to admit that the Fed might raise interest rates three times in 2018–let alone a potential four times–although I think it is gradually working its way toward that consensus.

Treasury market survives this week’s first test

Treasury market survives this week’s first test

The U.S. Treasury sold $28 billion of three-year Treasury notes and $21 billion of 10-year notes today–and the price of the 10-year note actually climbed, taking the yield down to 2.87%, three basis points lower than Friday’s 2.90% yield. This was a good result for the bond market and for the U.S. Treasury

I’m sure talks between China’s Liu He and U.S. Treasury this week about U.S. debt were “interesting”

I’m sure talks between China’s Liu He and U.S. Treasury this week about U.S. debt were “interesting”

Do you think that in the fall out from President Trump’s announcement on Thursday of tariffs on imported steel (25%) and imported aluminum (10%) China’s Liu He, on a visit to Washington this week, might have reminded Treasury Secretary Mnuchin that the U.S. needs to sell somewhere around $1 trillion in new Treasury debt in 2018 to pay for things like the Tax Cuts and Jobs Act and that China, the prime target of those tariffs on steel and aluminum, is one of the globe’s largest holders and buyers of U.S. Treasuries?

10-year Treasury yield back to 2.87% as market decides wage inflation isn’t likely to push the Fed to three rate increases in 2018

10-year Treasury yield back to 2.87% as market decides wage inflation isn’t likely to push the Fed to three rate increases in 2018

Traders and investors decided today that the Federal Reserve’s semiannual monetary policy report to Congress is wrong and that Wall Street’s own seers are right about wage-driven inflation. The Fed’s report, delivered to Congress today, makes it clear that the bank sees the labor market at or beyond full employment. On the other hand, Wall Street strategists keep saying, It’s different this time.

V bottom or double top before deeper correction?

V bottom or double top before deeper correction?

As of yesterday the Standard & Poor’s 500 stock index has climbed 5.8% in the last five trading sessions. That recouped much of the 9.03% drop (not quite an official correction of 10% or more) from January 26 through Februry 8. Which, of course, raises the question of what lies ahead–A rapid climb back through the old high of 2872.87 to new records (a classic V-recovery) or a move back to near the old high, followed by a failure at that level and a deeper correction of, say, 15%?

Inflation continues to creep higher in today’s CPI report; Treasury yields rise again

Inflation continues to creep higher in today’s CPI report; Treasury yields rise again

Headline CPI (Consumer Price Index) inflation climbed 0.5% in January, the Labor Department announced today. That was above the 0.4% increase expected by economists surveyed by Briefing.com. Core CPI, which excludes more volatile food and energy prices, climbed 0.3% in January. Economists surveyed by Briefing.com had expected a 0.2% increase.