[cobran20]

Looks like the markets are putting the pressure on Ben to raise interest rates.

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[cobran20]

Still on track for the 5.5% target.

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[Bernard L. Madoff]

 cobran20, on 04 May 2010 - 09:12 AM, said:

Still on track for the 5.5% target.

Better send that to Glenn, another 100bps by Christmas thanks.

[Bernard L. Madoff]

CDS' on Aussie Corporates...
http://www.bloomberg...6CM3D5ocU&pos=7

[cobran20]

Up to yesterday, our 90 day bank bill yields rose sharply over the two days after the RBA's rate rise. It will be interesting to see how much of a drop they would have suffered today. Our 10 year bond yields are however going against the grain (temporarily I hope!).

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[boz]

massive "normalisation" on the eu bond market with yield winding back at least 3 weeks (german up over 0.2% yield and Italian and Spanish down to below 4%)

[Bernard L. Madoff]

IMF debt back to the the mothership - US taxpayer.

[boz]

edit duplicate post

This post has been edited by boz: 10 May 2010 - 09:59 AM

[tom]

 boz, on 10 May 2010 - 09:21 AM, said:

massive "normalisation" on the eu bond market with yield winding back at least 3 weeks (german up over 0.2% yield and Italian and Spanish down to below 4%)

so Greek junk bonds last week would have been terrific buying! Take nerves of steel though.

[boz]

 tom, on 10 May 2010 - 01:47 PM, said:

so Greek junk bonds last week would have been terrific buying! Take nerves of steel though.

well, greek bonds is speculative buy as they are junk status, yesterday lots of specualtors lost money.
Last week I would have trade a pair like the Italian gov bond against the French (or Belgium), the spread was just out of whack when you compare the fundamental, spread was over 1% and even now at 0.75% in france favour is too much.
Some numbers FRance in relation to Italy:
FRance population is 3% higher, gdp is 20% higher, trade deficit is higher, public debt 15% lower (mesured in euro and not in relation to gdp), Household debt is 20% of GDP higher (probably 25% or more measured in euro), budget deficit is 2% of GDP higher (in 2009 france GOV spent 65 bileuro more then Italy and that is on top of the lower rate France is paying on debt interests), another thing is that France has lots of Nuclear power plant enough to supply mostly of energy, Italy has none.
Italy is part of the PIIGS and only AA rated, France is not part of the PIIGS and AAA rated (that is one reason of why rating agencies are a joke)

This post has been edited by boz: 10 May 2010 - 10:07 PM

[tom]

 boz, on 10 May 2010 - 09:44 PM, said:

well, greek bonds is speculative buy as they are junk status, yesterday lots of specualtors lost money.

Thanks for the info boz.

On trading bond pairs does forex also play a part or is it just relative yield movements?

Also teh greek bonds should be paying less yield now that they are guaranteed by the rest of europe? Shouldn't they?

[boz]

 tom, on 12 May 2010 - 04:22 PM, said:

Thanks for the info boz.

On trading bond pairs does forex also play a part or is it just relative yield movements?

Also teh greek bonds should be paying less yield now that they are guaranteed by the rest of europe? Shouldn't they?

you can't trade pairs, you can trade bonds futures and if you go long in one and short the other one is like trading the pair.
i only get real time data of aussie and USA gov bonds (haven't trade bonds future jet)

[boz]

bond yield is dropping significantly during these sharemarkets crashes, the AU 10 year gov bond is just below 5.4% at lowest in months, canadian bond is back up above the one of US and EU is quite stable, UK is also quite stable and it is quite remarkable giving the inflation rate getting well over 3% over there.
here is Roubini see bond troubles soon:

Quote

May 18 (Bloomberg) -- The U.S. may fall victim to bond “vigilantes” targeting indebted nations from the U.K. to Japan in a potential second stage of the financial crisis, New York University professor Nouriel Roubini said.

“Bond market vigilantes have already woken up in Greece, in Spain, in Portugal, in Ireland, in Iceland, and soon enough they could wake up in the U.K., in Japan, in the United States, if we keep on running very large fiscal deficits,” Roubini said at an event at the London School of Economics today. “The chances are, they are going to wake up in the United States in the next three years and say, ‘this is unsustainable.’”

The euro touched a four-year low against the dollar today on concern nations with the largest budget deficits will struggle to meet the European Union’s austerity requirements. Roubini, speaking in a lecture hall packed with students who then queued to meet him at a book-signing, suggested that the public debt burden incurred after the banking panic of 2008 may now cause the financial crisis to metamorphose.

“There is now a massive re-leveraging of the public sector, with budget deficits on the order of 10 percent” of gross domestic product “in a number of countries,” Roubini said. “History would suggest that maybe this crisis is not really over. We just finished the first stage and there’s a risk of ending up in the second stage of this financial crisis.”

The U.S. posted its largest April budget deficit on record as the excess of spending over revenue rose to $82.7 billion. The federal debt is currently projected to reach 90 percent of the economy by 2020.

‘Constrained’ Politics

Roubini, who predicted in 2006 that a financial crisis was imminent, said that the record U.S. budget deficit may persist amid a stalemate in Congress between Republicans blocking tax increases and Democrats who oppose cuts in spending.

“In many advanced economies, the political will to do the right thing is constrained,” he said.

Roubini reiterated that the euro region faces the threat of a breakup after the Greek budget crisis. The European Union said today it transferred the first instalment of emergency loans to Greece, one day before 8.5 billion euros ($10.4 billion) of bonds come due.

“Even today there is a risk of a breakup of the monetary union, the euro zone as well,” Roubini said. “A double dip recession in the euro zone” is “something that’s not unlikely, given what’s happening.”

To contact the reporter on this story: Jennifer Ryan in London at jryan13@bloomberg.net

Last Updated: May 18, 2010 16:53 EDT

[boz]

Just noticed the US treasury bonds long term (10 and 30 years) are turning down. in a day the us$ was strong specially in relation to commodity and those currecny related to it, seems yield are not going to drop as much as they did in the GFC, probably investors are more aware of long term risks and keep money liquid.
Lots of chritics to Angela Merkel for the short bans but she is proving right as yield on eu bonds is down considerably, even France got below 3% (i think was first time). also euro together with jen was the strongest currency today

[wulfgar]

 cobran20, on 30 April 2010 - 10:06 AM, said:

Looks like the markets are putting the pressure on Ben to raise interest rates.

No......no.......no! Ben is going the other way! In the last 12 months he has increased FRN's in circulation by only 3.6%. This is way below the generational historical average of closer to 7%. This is how he is trying to maintain the value of the USD without raising rates. This is so the old dollar shorters don't go broke. Of course this also means a drying up of nominal capital for lending.

Say hello to the mother of all credit squeezes!

[boz]

 wulfgar, on 21 May 2010 - 10:39 PM, said:

No......no.......no! Ben is going the other way! In the last 12 months he has increased FRN's in circulation by only 3.6%. This is way below the generational historical average of closer to 7%. This is how he is trying to maintain the value of the USD without raising rates. This is so the old dollar shorters don't go broke. Of course this also means a drying up of nominal capital for lending.

Say hello to the mother of all credit squeezes!

Isn't the money growth a pull strategy and not a push on from the FED? I mean the fed set rates and market decide how much money it needs, I don't think bernenke said no to banks asking for money diring last year, may be the slower growht is because too much extra was coming out the year before.
to me the only push strategy to limit money in market without touching rates is by increase the bank reserves, and for the other way to do the quantitative easing

[cobran20]

 cobran20, on 07 May 2010 - 10:03 AM, said:

Up to yesterday, our 90 day bank bill yields rose sharply over the two days after the RBA's rate rise. It will be interesting to see how much of a drop they would have suffered today. Our 10 year bond yields are however going against the grain (temporarily I hope!).

I'm now beginning to think that we could be in for a deja vou of 2008 and consider that potentially the next move in interest rates might be down. Need to watch those 90 day yields closely that they don't drop much below 4.5%.

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[boz]

Quote

Australia to Keep Buying RMBS as Market Improves (Update1)
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Ed Johnson

May 25 (Bloomberg) -- The Australian government said it will keep investing in residential mortgage-backed securities even as the market for the bonds appears to have stabilized.

The Australian Office of Financial Management has invested about A$8.7 billion ($7.2 billion) in 27 RMBS transactions under a program introduced during the financial crisis to stoke home- loan competition, it said in an e-mailed statement today.

“Given the high credit quality of Australian RMBS and the program objectives, the AOFM is willing to invest at tighter levels,” according to the statement. “This will continue to be balanced with the desire to encourage continued private sector participation.”

The government invests in mortgage-backed bonds to increase competition in the nation’s home loan market to help smaller lenders fund loans. Australia’s regional banks and non-bank lenders, which were heavier users of securitization as a funding source, lost market share to the nation’s four largest banks after the U.S. subprime collapse shuttered global credit markets.

The AOFM expects to invest in A$150 million of RMBS to be issued by Suncorp-Metway Ltd. at an initial price guidance of between 110 basis points and 130 basis points more than the bank bill swap rate, according to the statement. A basis point is 0.01 percentage point.

Suncorp Bank said today in a separate statement it plans to sell A$500 million of notes backed by a pool of prime residential mortgage loans. It hired Deutsche Bank AG and Macquarie Group Ltd. to help with the transaction, which will price on or before June 1.

To contact the reporter on this story: Ed Johnson in Sydney at Ejohnson28@bloomberg.net.

Last Updated: May 24, 2010 20:05 EDT

bloomberg

[boz]

Quote

Yields on 10-year notes /quotes/comstock/31*!ust10y (UST10Y 3.16, -0.04, -1.19%) fell 4 basis points to 3.16%. They earlier touched 3.07%, the lowest in 13 months.

Bond yields move inversely to prices and a basis point is 0.01%.

Yields on the current 2-year notes /quotes/comstock/31*!ust2yr (UST2YR 0.76, +0.02, +3.27%) reversed an earlier decline to rise 2 basis points to 0.76%.

They fell as low as 0.67% earlier -- the weakest since December. The two-year yield's all-time low, reached during the depths of the financial crisis, was 0.65%.

Yields on 30-year bonds /quotes/comstock/31*!ust30y (UST30Y 4.06, -0.03, -0.81%) fell 3 basis points to 4.07%, after having dipped below 4% earlier to touch a 7-month low.

Bonds pared their gains in afternoon trading as the euro and stocks recovered from the lows of the day.

...

seems the swinging back ball is even taking bonds yield lower then during the GFC.
also german bond yield is at 20+ years low (and then everyone complain how german are spending money to bailout greece)
My link

This post has been edited by boz: 25 May 2010 - 10:00 PM

[boz]

Quite an unusual week for government bonds. PIGS yields dropped quite significantly in the last couple of days, today alone the Spanish dropped 0.15% and in 3 days the Italian has gone from around 4.3% to 4% now. Record low also for The Japanese Yield at 1.21%.
Other country like USA, UK or Germany and France haven't changed.