Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, November 01, 2010
U.S. Treasury Bond Market Stabilises / Interest-Rates / US Bonds
By: Levente_Mady
The bond market stabilized last week. Although the economic data schedule was rather busy, trading was more heavily influenced by the Treasury auctions and month end activity as the second tier fundamental news did not offer any major surprises. While the volatility in the currency markets continued, the chop was more sideways and less directional. Trading in stocks and bonds had the same directionless character. The Treasury auctions were somewhat strange during this cycle. Normally the shorter maturities are relatively well received and the longest tranche can hit some bumps. Last week the 2 year auction was mediocre, the 5 year was sloppy but the 7 year bonds were very well received on Thursday setting up – as advertised - a seasonal bond rally into month end very nicely.
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Friday, October 29, 2010
QE2 Sends U.S. Interest Rates Higher / Interest-Rates / US Interest Rates
By: Mike_Larson
So if the latest reporting is to be believed, QE2 is a fait accompli.
The Wall Street Journal on Wednesday said the Federal Reserve plans to purchase “a few hundred billion dollars” worth of Treasuries over a period of “several months.” The Fed will stick largely with Treasury notes, rather than bills or bonds, with the lion’s share of the buying focused on securities with maturities between two and ten years.
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Friday, October 29, 2010
Are the German Bund Bulls Finished? / Interest-Rates / International Bond Market
By: Seven_Days_Ahead
During the Euro zone sovereign debt crisis the Bund was a strong safe-haven trade. This may seem paradoxical given the nature of the crisis: investors were worried about the solvency of several Euro zone governments, but sought shelter from government default in the Euro Bund.
Thursday, October 28, 2010
U.S. Treasury Bond Market Developing Disaster / Interest-Rates / US Bonds
By: EWI
Greetings investor,
If you have money in mutual funds, Treasury bonds, municipal bonds or high-yield bonds, Robert Prechter has just issued a crystal-clear warning for you: Your money could be at risk.
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Wednesday, October 27, 2010
PIMCO Bill Gross's Arrogant Endorsement of Fed's QE Policy / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
It is not often you see bond managers openly embrace Ponzi schemes, but that is exactly what Bill Gross did in his post Run Turkey, Run.
Read full article... Read full article...There’s another important day next week and it rather coincidentally occurs on Wednesday – the day after Election Day – when either the Donkeys or the Elephants will be celebrating a return to power and the continuation of partisan bickering no matter who is in charge. Wednesday is the day when the Fed will announce a renewed commitment to Quantitative Easing – a polite form disguise for “writing checks.” The market will be interested in the amount (perhaps as much as an initial $500 billion) as well as the targeted objective (perhaps a muddied version of “2% inflation or bust!”). The announcement, however, has been well telegraphed and the market’s reaction is likely to be subdued. More important will be the answer to the long-term question of “will it work?” and perhaps its associated twin “will it create a bond market bubble?”
Wednesday, October 27, 2010
Quantitative Easing Program Confirmed by Federal Reserve / Interest-Rates / Quantitative Easing
By: David_Urban
Not content on waiting to reveal to the markets after the conclusion of the November 3rd Federal Reserve meeting, the St. Louis Fed just published an article in the latest Monetary Trends entitled 'Is More QE in Sight?'
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Wednesday, October 27, 2010
U.S. Treasury Bond Bubble about to POP! / Interest-Rates / US Bonds
By: Claus_Vogt
Financial history shows that interest rates — and hence bond prices — have risen and fallen in long-term trends spanning decades. The following chart shows the 10-year Treasury since 1953.
As you can see, rates started rising shortly after the recession that ended in May 1954. In the second half of the 1960s this uptrend gathered speed. The market seemed to smell high inflation coming in the 1970s. And by the end of that decade and into 1980/81 rates soared. In fact, they peaked at slightly more than 15 percent — six times higher than the 1954 low!
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Wednesday, October 27, 2010
Fed Builds Bubble in Junk Bonds / Interest-Rates / US Bonds
By: Mike_Shedlock
The Fed's misguided policies have not done a thing for small businesses, the unemployment rate, or the real economy in general but they have induced a mad dash for yield in junk bonds, easily in a bubble state right now.
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Tuesday, October 26, 2010
Prechter on The Next Major Disaster Developing for U.S. Treasury Bond Holders / Interest-Rates / US Bonds
By: EWI
Greetings investor,
If you have money in mutual funds, Treasury bonds, municipal bonds or high-yield bonds, Robert Prechter has just issued a crystal-clear warning for you: Your money could be at risk.
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Tuesday, October 26, 2010
Bernanke's $4 Trillion Quantitative Easing Dilemma / Interest-Rates / Quantitative Easing
By: Mike_Whitney
Ben Bernanke is in a real fix. His quantitative easing (QE) program is designed to boost stock prices, lower bond yields, and weaken the dollar.
But the market has already priced all that in, so when he announces the start of the program on November 3, there's a good chance that things will either stay the same or head in the opposite direction. That's bad for Bernanke. Just imagine if the dollar strengthens just as the Fed chairman begins buying-up Treasuries to push the dollar down. He'll look pretty foolish. But that could happen because the dollar has already slipped nearly 7% since August and is overdue for a rebound.
Tuesday, October 26, 2010
Quantitative Easing (QE2): Who Gets the Fed’s Printed Money? / Interest-Rates / Quantitative Easing
By: Chris_Ciovacco
Part 2 of a 6 Part Video Series on Quantitative Easing: In Part 1: Quantitative Easing Targets Asset Prices, Not Bank Reserves, we discussed how Mr. Bernanke’s quantitative easing program is implemented via the Fed’s eighteen primary dealers, not traditional banks.
We do not know the size of the Fed’s program, nor do we know how the markets will react in the short-term. However, one thing we know with near certainty – a large quantity of newly printed money is going to flow from the Fed to the eighteen primary dealers. We also know a significant amount of the electronic greenbacks will flow from the primary dealers into the accounts of their clients.
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Monday, October 25, 2010
Is the Fed Sorry It Promised QE2? / Interest-Rates / Quantitative Easing
By: Sy_Harding
The Fed has had stocks and gold spiking up since early September, and the dollar plunging, first on hints that it might consider providing another round of ‘quantitative easing’ if the economic recovery continued to worsen, and then practically promising it’s ready to do so.Read full article... Read full article...
Saturday, October 23, 2010
So, Who Is Selling U.S. Treasury Bonds? / Interest-Rates / US Bonds
By: Sy_Harding
QE2 is coming, and it isn’t stocks the Fed buys in large quantities with its quantitative easing. It buys treasury bonds, in an effort to drive long-term interest rates down, which should drive the price of bonds up.
But the bond market hasn’t been as excited about the idea of all that buying as the stock market has been. In fact, just the opposite. Treasury bonds have been tumbling since late August.
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Thursday, October 21, 2010
Japan Quantitative Easing – A Curious Conundrum / Interest-Rates / Quantitative Easing
By: David_Urban
As I mentioned in the Week in Review the move last week by the Bank of Japan to cut interest rates and enact a new quantitative easing program along with the lack of moves by Indonesia and Australia coupled with the immediate rally in equity markets looks increasingly like a coordinated global intervention to push up equity prices to help Japan.
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Thursday, October 21, 2010
Foreigners Buy $117 Billion of U.S. Treasury Bonds During August / Interest-Rates / US Bonds
By: OilPrice_Com
Dave Forest writes: The U.S. bond market is murky these days.
Yields have been plummeting. But some of the action is almost certainly due to the Federal Reserve once again buying Treasuries. Since August 19, the Fed has bought $40 billion in government bonds.
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Wednesday, October 20, 2010
China Interest Rate Hike, Once Is Never Enough / Interest-Rates / China Economy
By: James_Pressler
In a move that caught international markets flatfooted, this morning the People's Bank of China (PBoC) tightened two key interest rates by 25 basis points, its first rate hike since December 2007. Few analysts expected a rate hike any time before Q1 2011, so such a sudden hike - that lacked any accompanying discussion or explanation - triggered a wave of uncertainty as everyone scrambled to explain the move. So, along with the mob, we offer our own interpretation of today's events.
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Tuesday, October 19, 2010
U.S. Treasury and Junk Bonds, A Casino Royale? / Interest-Rates / US Bonds
By: Kieran_Osborne
The Federal Reserve’s (Fed) extraordinarily low interest rate policies have encouraged fixed income investors to take on evermore exposure to credit risks. With the global economic recovery looking more and more unstable with every new piece of economic data released, fixed income investors may be following a strategy akin to gambling at the roulette table. Investors may want to be careful not to let this transpire into a bad vacation in Vegas; we are concerned many investors may find themselves left out of pocket, hung-over with a bad taste in their mouth.
Tuesday, October 19, 2010
Further Limiting Your Risk with CDs or Bonds / Interest-Rates / US Bonds
By: Nilus_Mattive
It’s now official: As I suggested last week, Social Security recipients are not getting any cost-of-living increase in 2011. This marks the second straight year of flat monthly checks.
That fact, combined with the paltry interest rates on many traditional income investments, is certainly causing a lot of people major angst right now.
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Monday, October 18, 2010
What Can We Expect Next from the Bernanke Fed? / Interest-Rates / Central Banks
By: MISES
Roger Garrison writes: On October 15, Ben Bernanke spoke at the Boston Fed's conference, "Monetary Policy in a Low-Inflation Environment." His remarks were long and ponderous and consisted mostly of "Fedspeak" along with seeming excerpts from a typical intermediate-macroeconomics textbook. He rehashed the Fed's statutory mandate of maximum employment and price stability — which comes from the Keynes-inspired Full Employment Act of 1946.
Saturday, October 16, 2010
U.S. Debt Pie, A Nation of 300 Million Suckers / Interest-Rates / US Debt
By: Seth_Barani
Lets analyze what is happening to the fixed-income instruments, mainly Treasury Bonds. There are two likely scenarios. One is, (scenario #1) Bernanke tries to salvage the economy. The other is (scenario #2), he only cares for US government's ability to service its debt.