Repo Market

Are Repos Signaling A Massive Bond Short Ahead Of Payrolls?

It's been a few months since we saw any major dislocations in the Treasury repo market, i.e., collateral shortages as a result of surging TSY shorts... However, the peace and quiet quiet in the repo market was shattered this week...

Short Sellers Are Aggravating China's Bond Rout - Regulators AWOL (For Now)

Chinese regulators have a history of clamping down on bearish wagers in the stock and currency markets, but have yet to take measures to prevent short-selling of bonds. If none are forthcoming, we expect to see more of the cascading sell-offs in Chinese government bonds, corporate bonds and equities which were a feature of trading in November.

What Is Behind China's Bond Rout?

What happened in China in the past two weeks that led to a bond rout and drove up interest rates sharply? Here are the possibilities...

Three Straight Weeks Of This Can't Be Ignored

"...potentially as an escalating warning about systemic liquidity, collateral and otherwise...After all, if something unknown is clogging, removing, or just plain disrupting collateral flow it’s not likely to be an isolated case; and certainly not for three weeks running..."

Is A US Default Imminent: Liquidation Panic Grips T-Bills Market

While the politicians and the mainstream media are playing down any concerns about the US debt ceiling, Treasury Bill market participants are seeing chaos as the yield curve has snapped across the Sept-Oct divide with panic-buying in bills that mature ahead of the September-end (Q3-end liquidity needs), and dumping of October bills.

It's Always Just A Question Of Price

"I don’t buy the idea that Central Banks are incapable of stimulating the private sector to borrow. Like most things in life, it’s just a question of price, and these Central Banker knobs seem willing to pay whatever it takes."

China Manufacturing PMI Jumps To Five Year High

China's reflation story (on the back of a record amount of debt created last year) was put on display on Friday morning when both the Chinese manufacturing and non-manufacturing PMI rose more than expected, with the Manufacturing PMI rising to a level not seen since April 2012.

David Stockman Offers "More Proof Of Janet Yellen's Idiocy"

"Anyone buying stocks based on confidence that the Fed has their back notwithstanding Wednesday’s action surely deserves the pounding just ahead. What Yellen had to say doesn’t even reach the status of babbling; it was flaming incoherence..."

Mediocre 30Y Auction Tails Due To Lack Of Short Squeeze

As expected, today's 30 Year tailed when it emerged in the repo market that there would be no short squeeze, printing at 3.170%, the highest yield since September of 2014, and also a modest 0.1bp tail above the 3.169% When Issued, a far cry from yesterday's 10Y auction stopping through by 2.0 bps.

Short Squeeze Drives Blockbuster 10Y Auction, Directs Surge

Following today's shortage of 10Y paper in repo, some expected that today's 10Y auction would be strong. Well, it was blockbuster: printing at 2.56%, it stopped a whopping 2bps through the 2.58% When Issued, confirming a last minute scramble for paper.