Spanish Bond Yields – Who is a “natural” buyer of 10 year
Spanish 10 year bonds are above 5.5% now. They once again failed to hold early gains, and the losses seem to be accelerating. Once again, the back end of the curve is “flattening” with the 5 year 9 bps higher, while the 10 year is only 4 higher. The 2 year has barely budged, which […]
Afternoon T: Bulls in Ruby Red Slippers Clicking Their Heels
The market is struggling to shake off 3 days of mediocre US data, bad data out of Europe and China, and renewed signs that all LTRO did was temporarily suppress yields while fixing nothing. IG18 became the “clever” trade with bulls actually waiting for the roll to go long credit. The richness, and willingness to […]
The T Report: Ruby Red Slippers
For 2 days, the markets bought the dip in spite of negative economic data and signs that nothing has been fixed in Europe and that Spain could quickly become another problem. Right now a lot of bulls are clicking their heels together and hoping to get back to the highs. That is a very risky […]
Spanish Yield Curve – A loud whisper?
With ZIRP and LTRO it is hard to get a good read on the Spanish yield curve and what anything means. Spanish 10 year yields have risen 9 days in a row, 5 year yields have moved higher 8 out of 9 days, and the 2 year has been much more mixed, until recently. The […]
Spanish bond yields ready to breakout higher?
I don’t follow charts that much, but a lot of Chico’s chart based calls have been correct and this one is intriguing as he points out that the yields are potentially breaking out of a ceiling. A lot of people are wondering why Spain is suddenly a focus? It has been drifting for almost […]
Seems a lot like July 2011 again, and watch out for Spain.
Spanish yields are back above Italian bond yields, like they were in July 2011. For both countries, the yields are actually similar to where they were back then. I think the fact that Italy is back to tighter than Spain is meaningful. While Italy is a long way from being fixed, it is clear that their former leader was […]
The T Report: Strength Across Almost All Credit Markets
All the CDS indices are better this morning. IG, MAIN, and SNR FINS are all 2 to 3 bps tighter again today, and even HY17 is participating in the rally and is trading above 99. HY17 has been a laggard, but has been outperforming the HY ETF’s. Both HYG and JNK closed slightly lower yesterday […]
Greek CDS Settlement – 3 Wrongs Do make a Right
One of the central premises of CDS is that the “basis” package should work. An investor should be able to buy a bond, and buy CDS to the same maturity and expect to get paid close to par – either by the bond being repaid at par and the CDS expiring worthless, or through a […]
The T Report: CDS Roll – More Technical Than Meaningful
A relatively quiet morning in credit in spite of the CDS rolls. The “on the run” single name CDS contract changes from March 2017, to June 2017. So every single name 5 year quote will now be for June 20, 2017. A little bit technical for the market, and a lot annoying for most clients. […]
The CDS Auction Process – Not So Scary
First, I believe that the regulators should be forcing CDS to be cleared if not exchange traded. But in any case, there are once again concerns about the “auction” process and what it means. Yes, it is slightly weird to settle a contract based on an “auction” but it is actually both a useful step […]