SAXO Althea Spinozzi
ECB preview: data-driven until June, Fed-dependent thereafter.
Summary:At this week’s meeting, the ECB might lay the groundwork for a potential rate cut in June.The central bank's commitment to a data-dependent approach is expected to depreciate the euro currency further.After the first interest rate cut, the prospec...
6 months ago
QT Tapering Looms Despite Macroeconomic Conditions: Fear of Liquidity Squeeze Drives Policy
Summary:To prevent T-bills from accelerating their runoff from the Fed balance sheet, QT tapering is set to commence in June.By reducing the QT cap from $60 billion to $30 billion per month, as stated in the latest FOMC minutes, the Fed aims to reduce the...
6 months ago
All you need to know about the upcoming 20-year US Treasury auction.
Summary:The auction is likely to benefit from the second highest auction yield on record, a below average auction size and a reasonable pick up over 30-year US Treasury.Recent bearish bond sentiment, coupled with the illiquidity inherent in this maturity,...
6 months ago
Micro Treasury Yield Futures Contracts: a simple way to trade interest rates markets.
Micro Treasury Yields Futures are:Traded in yield, the most widely tracked metric in US Treasury markets.Cash-settled. The contracts are structured such that each basis point of yield (0.01%) equates to $10 in size.Three major tenors available on the Saxo...
5 months ago
Italian BTPs are more attractive than Bunds in today's macroeconomic context
Summary:Italian BTPs are appealing asset in the event of persistent inflation, as they provide a stronger hedge against it.Their correlation with the Bunds puts them in a position to also benefit in the event of heightened tensions in the Middle East.Conc...
5 months ago
Analyzing market impacts: insights into the upcoming 5-year and 7-year US Treasury auctions.
Summary:Despite the considerable size of the auction, the 5-year US Treasury auction is poised to outperform the 7-year auction. This is due to the likelihood that the current pricing of these notes may result in the second-highest auction yield since 200...
5 months ago
A tactical guide to the upcoming quarterly refunding announcement for bond and stock markets
Summary:There's a significant probability that the forthcoming quarterly refunding announcement (QRA) update will buoy stock and bond markets.Gross US Treasury issuance is set to decrease from its peak of over $7.2 trillion for the first time since Q2 202...
5 months ago
Bond Markets: the week ahead
Summary:Despite first-quarter GDP growth falling short of expectations, bond markets focus on the persistent core PCE, anticipating a patient stance from the Federal Reserve on rate cuts.The Quarterly Refunding Announcement (QRA) this week holds significa...
5 months ago
Insights into this week's US Treasury refunding: 3-, 10-, and 30-year overview.
Summary:This week’s three- and ten-year auctions are likely to draw solid demand. Despite record large auctions size, the risk-reward offered by these tenors is favorable amidst the macroeconomic backdrop.Monitor the 30-year tenor for duration demand. The...
5 months ago
FOMC Preview: A Data-Dependent and Balanced Approach
Summary:The July FOMC meeting is expected to have minimal impact on market repricing. The Federal Reserve is anticipated to hold interest rates steady, with a potential rate cut in September, supported by recent economic data advocating a cautious approac...
2 months ago
BOE Preview: Better Safe Than Sorry
Summary:We BOE is expected to keep the Bank Rate unchanged at 5.25% due to the need for potential upward revisions in macroeconomic projections, with service inflation and wage growth remaining well above target.Vote split considerations: The two votes fo...
2 months ago
Why Investors Must Pay Attention: BOJ’s Hawkish Moves Could Roil Global Markets
Summary:The BOJ is comfortable with higher long-end rates as long as real long-term interest rates remain negative, maintaining monetary easing effects. This suggests the BOJ is okay with 10-year JGB yields moving toward 2%, likely prompting Japanese inve...
2 months ago
Why Bonds Are Regaining Their Hedging Power in Today’s Market
Summary:The recent market selloff shows that bonds are once again acting as a hedge against a stock market crash.With yields currently at 3.7%, bonds provide better compensation for risk and a cushion against price declines compared to pre-COVID levels wh...
2 months ago
Insights into this week's US Treasury refunding: 3-, 10-, and 30-year overview.
Summary:Safe-haven demand will be scrutinized this week as the 3-, 10-, and 30-year US Treasury auctions take place with significantly lower yields following last week’s FOMC meeting and weak employment data. Yields have dropped to the lowest since Decemb...
2 months ago