Bond

"Hard" Economic Data Slides To One Year Lows

With 2017 EPS expectations at 2017 lows, 2017 GDP expectations at 2017 lows, and real bond yields at 2017 lows, it should hardly be surprising that 'hard' economic data has collapsed to its lowest level in over a year. What should be surprising is the equity market's desperate clinging to 'soft' survey data's high hope levels...

So Many Triggers

The question is not “if” but “when.” In the end, it will matter little which trigger it will be, as, like a string of firecrackers, when one explodes, a chain reaction is set off.

In First Week Of ECB "Taper", Draghi Ramps Up Purchases Of Corporate Bonds

It may come as a surprise to ECB watchers, that contrary to expectations, not only did the ECB not trim its corporate purchases for the week, but appears to have ramped bond buys, as its holdings rose from €75.46 to €77.87, a €2.41BN increase, or about €482MM per day, roughly a 40% increase from recent run-rates.

Goldman Downgrades French Bonds Ahead Of Elections

"We recommend going tactically short June French futures (OATM7) at 147-72, for an initial target of 144.00, and stops on a close above 150.00. This position allows one to take a directional view on duration in a market that scores as very expensive on our valuation metrics."

Key Events In The Holiday-Shortened Week

In this holiday-shortened week (markets closed for Good Friday), focus turns to several inflation prints in G10 in the week ahead, with US and UK inflation data likely to get the most attention. In addition, there are a few scheduled speaking engagements by Fed officials, including a speech by Fed Chair Yellen on Monday.

French Stocks, Bonds Stumble As Communist's Gains Upset Poll Predictions

Following our warnings last week of anxious hedging ahead of the French election, new polls this weekend have stirred the pot of fear further as communist candidate Jean-Luc Melenchon surges making the race a four-way contest with many suggesting this favors Le Pen and the anti-EU voters.

Frontrunning: April 10

  • Euro hovers above one-month low as French election nerves grow (Reuters)
  • French Election Risk Reawakens as Bonds Drop, Volatility Jumps (BBG)
  • Hopes fade for U.S. bank earnings despite rally in financial shares (Reuters)
  • Skepticism Grows About Higher Fed Rates Helping Banks’ Margins (BBG)
  • Record Bond Issuance Signals Doubts About Economy (WSJ)

Futures Flat Ahead Of Yellen As Geopolitical Risks Loom; Fear Barometer Spikes

S&P futures point to a slightly lower open, while Asian and European stocks are likewise modestly in the red. Trading volumes are muted for most markets on Monday with investors spooked by rising geopolitical tensions in the Middle East and the Korean peninsula. It is also a holiday-shortened week in much of the West.