Across the Curve

ECB Assets Rise Above 36% Of Eurozone GDP; Draghi Now Owns 10.2% Of European Corporate Bonds

As global markets recoil over concerns the Trumpflation trade may be rolling over, the ECB continues to be busy providing the actual levitating power behind near record highs in stocks, and as of the latest update, the ECB's balance sheet rose above €3.72 trillion, equal to over 36% of the entire Eurozone GDP. It also means that Mario Draghi now owns over 10% of the entire European corporate bond market.

Bonds & Bullion Are Surging As Small Caps Give Up 2017 Gains

Following Friday's plunge in bond and bullion prices, dollar weakness (on Trump's comments), Brexit uncertainty, and looming inauguration appear to have sent a ripple of anxiety through capital markets sending Treasury yields tumbling (6-8bps lower across the curve), gold prices soaring (above $1215), and stocks tumbling (Small Caps back in the red for 2017)...

What Wall Street Expects From Today's Payrolls Reports

With all eyes likely on wage growth indications in the subtext of tomorrow's payrolls report (following The Fed Minutes' comments on full employment), Goldman Sachs is forecasting a better-than-expected 0.3% rebound in average hourly earnings (helped by more favorable calendar effects) and a better-than-expected 180k payrolls print (albeit with a small rise in the unemployment rate). However, they are careful to note that any downside can be blamed on "a considerable drop in temperatures."

3M LIBOR Tops 1.00% For First Time Since 2009

While US equity prices push ebulliently towards their next level of Nirvana, financial conditions continue to tighten for American businesses. For the first time since April 2009, 3-month LIBOR - one of the most important reference rates for business financing - topped 1.00% today.

It's The Dollar, Stupid!

We expect global monetary authorities to protect the dollar as long as they can and we expect them to fail. Stocks and bonds will react violently; stocks and weak credits falling, treasuries prices rising (at first). That failure will lead to hyperinflation – not driven by demand, but rather by central bank money printing. A new global monetary understanding will then emerge.

Treasury Sells 2Y Paper In Poor, Tailing Auction At Highest Yield Since 2008

With today's On The Run 2Y Tsy trading very special in repo, down as much as -1.75% due to the ongoing year-end shortage of collateral across the curve, and which was the most-shorted since the summer we would have expected at least some strength in today's 2Y auction of Cusip U99, with a cash rate of 1.25%. Alas, the auction was jsut short of a disaster.

Something Wicked This Way Comes

"The narrative about an improving economy, thriving jobs market, and glorious future is bullshit. I know it. You know it. And your establishment puppeteers know it. But only “fake news” sites would dare reveal these inconvenient truths."