【 以下文字转载自 CaliforniaMortgage 俱乐部 】
发信人: blueangel2 (Feedback is power), 信区: CaliforniaMortgage
标 题: Interest Rates Jump to Highest Level in Three Months zz
发信站: BBS 未名空间站 (Wed Aug 15 19:03:37 2012, 美东)
Treasury yields moved to their highest level in three-months Wednesday, as
selling hit the bonds sought as the safest haven in a scary world just a
month ago.
Traders said improving U.S. economic data was behind the selling. But they
also pointed to a big seller overnight during the Asian session, who helped
drive the 10-year yield back above 1.75 percent.
In the New York session, the 10-year yield moved above 1.80 percent for the
first time in three months, well above the record 1.39 percent it fell to in
July as fears about Europe's debt crisis swirled. It has moved 0.155
percent in three days for its largest three-day yield gain since early June.
"It's a continuation of a trend we've seen for some time now. If we look at
the 10-year, we're at 1.80 now. We were at 1.46 at the start of the month so
we're up 34 basis points in two weeks," said Dan Greenhaus, global market
strategist with BTIG. "It's coincident with the larger story which is that
the economic data is not just getting better but that the Fed might do QE (
explain this)." The 30-year added 7 basis points to 2.91 percent.
Bond manager Bill Gross, meanwhile, also turned on the 10-year Wednesday.
Gross, co-chief investment officer at Pimco, told Reuters that the Federal
Reserve's (explain this) stimulus programs are inflationary, and that's why
he favors five-to-seven year maturities and would sell 10-year and 30-year
Treasurys.
Gross tweeted that the Fed is where bad bonds go to die. "Today it was 10-
years. Tomorrow 30-years. Stay short my friends," he wrote.
As some of the economic numbers have been surprising on the upside, there
has been market talk that the Fed may now not ease, as expected, at its
September meeting. Many economists say the Fed is watching the data closely,
and its members may not have made up their minds on whether to carry out
another round of bond purchases. The next event markets are watching is the
speech by Fed chairman Ben Bernanke at the Fed's Jackson Hole symposium Aug.
31. (Read More: Fed's Fisher Says More Easing Won't Help Much)
"You still have a fair amount of data" before the next Fed meeting Sept. 12,
said John Briggs, senior Treasury strategist at RBS. "The data has not
moved the needle measurably one way or the other. We just stopped
disappointing. Even with this better data, I'm still seeing two-percent
growth. You could make an argument that even if they're on the fence, they
might go now because they would not go later," closer to the election. (Read
More: Dunkelberg-More Fed Easing Will Only Help Big Banks, Not Employment)
Greenhaus said he does not think the data has been enough to change the Fed'
s view on easing. "I think they like the idea of taking out insurance. I don
't think it's off the table at all," said Greenhaus. He also noted the
inflation data is not a hurdle for Fed easing, since the latest CPI data
released Wednesday showed consumer prices were unchanged, for a second month
in a row.
The Fed's goal, in quantitative easing, is in part to drive investors into
riskier assets, and Greenhaus said, contrary to what many believe, QE has
helped lift interest rates.
"We think the QE call has always been delicate. This is one reason why
stocks aren't moving that much. Treasurys are the medium the Fed uses to
impart liquidity into the global financial system," said George Goncalves,
Treasury strategist at Nomura Americas. "With Treasurys underperforming, you
can extrapolate that it's bad for stocks. Stocks have been just hanging out
there for the last few days."
The S&P 500 broke through 1,400 for the first time in three months last
Tuesday and a week later, on Wednesday, it was at 1,405.
But Goncalves said despite the better-than-expected reports, such as
Wednesday's industrial production and Tuesday's retail sales, it's still not
enough to affect the Fed. Goncalves said he does not expect interest rates
to move much higher for now, and if the 10-year gets closer to 185/1.90, the
Fed may take action.
"They're going to start jawboning it, and doing verbal intervention. Rates
should start to stabilize here, and if they don't, we should expect a full
court press from the Fed at the end of the month," he said.
CRT Capital chief Treasury strategist David Ader said the big trade
overnight really did set the tone for the market. "That did most of the
damage," he said.
"It's unusual to see that," he said. "There's roughly $9 billion of 10-years
that traded during the wee hours. That's a lot."
Ader said a number of factors combined to send rates higher. He said there
has been a large number of corporate issuance for August, for example. "
People were just a bit out of position," he said.
The change in data is not enough to impact the Fed yet.
"The data has gone from presenting universally downside surprises to
presenting a few downside surprises," he said.
