Markets Await Fiscal Stimulus Plan

The unrelenting flight-to-safety trade took a breather yesterday, but it in no way represents a turning of the tide for this morning the risk-off trade is with us once again. The impetus for the move this morning stems from the uncertain fiscal stimulus that is still being hashed out in D.C.. While some of the…

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Yields Race to the Zero Lower Bound

Apparently We Can Go Pretty Low If anyone thought the late February stock sell-off would be a one and done development the week just past, and this certainly morning, have cracked that illusion big-time. Historic moves are in store this morning with the 30-year bond moving overnight to a low yield of 0.70% and is…

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The Strong Before the Storm

February was another strong month for the labor market but with the survey week occurring prior to news of the coronavirus reaching U.S. shores it’s likely the last solid jobs report for the next several months. And even though the report was mostly solid, the bifurcation of the economy continues with most of the strength…

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Fed Cuts Rates But Treasuries Remain Unimpressed

The Fed’s first inter-meeting rate cut since 2008 didn’t stem the fear and angst in stocks, and it added rocket fuel to the rally in Treasuries. The size of the cut (50bps to 1.00%-1.25%) was generally expected but the timing was uncertain with many, including us, thinking they would wait until the March 18 FOMC…

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How Low Can We Go?

Well that was quite the week wasn’t it? It reminds us of the quote, “There are decades where nothing happens; and there are weeks where decades happen.” Last week certainly qualifies as the latter.  With stocks crashing from all-time highs to correction territory—and threatening bear market country— some respite from the  volatility seems due, but…

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Risk-Off Fever Still Infecting Investors

The coronavirus risk-off move continued yesterday and with new cases springing up the question is starting to  be raised as to when to move from a containment strategy to one of mitigation? There’s still a lot of unknowns about the virus and its lethality so the strategy switch will take more time, but if cases…

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Virus Spreads into Europe Igniting Fear and Risk-Off Trades

A Surfeit of Economic News this Week but Virus Headlines Will Control Trading Once again, coronavirus developments will drive trading more than any single economic release and that is certainly the case this morning.  Revelations last week of cases spreading into Korea and Japan, not to mention Singapore, spurred strong flight-to-safety trades into Treasuries.  Revelations…

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It’s Not Just Virus Fears Pushing Yields Lower

If you needed any more convincing that Treasuries were mostly ignoring economic news and trading on the latest coronavirus headlines this week has  provided plenty of evidence. From blowout Empire Manufacturing numbers, to solid housing starts and permits, to a steamy PPI reading, to a blockbuster Philly Fed  factory outlook, the Leading Index popping to…

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Virus, Housing and Fed Minutes on Tap This Week

This holiday-shortened week will continue to be dominated by coronavirus news. That one issue will drive trading more than any single economic release or Fed speak. That being said, the FOMC minutes from the January meeting will be released tomorrow but the fact the meeting took place before  the seriousness of the virus was appreciated…

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So-So Retail Sales Sparks More Treasury Buying

Yesterday, Treasuries easily handled a slightly-hotter-than-expected CPI release as a jump in coronavirus  cases contrasted with a more upbeat scenario on Wednesday. This morning, the other first-tier report of the week is getting its due as January retail sales were just released. Coming on the heels of an upbeat December sales report, January was expected…

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Powell Strikes a Positive Outlook but it’s Tempered by Virus Unknowns

Fed Chair Powell’s first of two days on Capitol Hill went mostly as expected. He characterized the economy as “in a very good place,” but also noted that some impact from the spreading coronavirus on the economy is inevitable. He did say the Fed is watching the virus’ impact to judge if it becomes persistent…

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Powell Travels to Capitol Hill This Week

This week will provide a potpourri of Fed speak, retail spending and inflation numbers, along with industrial  production and consumer sentiment. Top billing this week goes to Fed Chair Jerome Powell who travels to Capitol Hill for his semi-annual Congressional testimony. He’ll begin tomorrow in front of the House Financial Services Committee and on Wednesday…

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