Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Saturday, June 20, 2015
The Simplest Way to View the U.S. Bond Market / Interest-Rates / US Bonds
By: DailyWealth
Dr. David Eifrig writes: It has been a wild time for fixed-income investments over the last couple years...
Interest rates are historically low in the U.S. In Europe, rates have spent time in negative territory... meaning investors were willing to take a guaranteed loss.
It can be hard to get a handle on what's happening today in the bond market... never mind where things may be headed tomorrow.
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Friday, June 19, 2015
US. Bonds and Banks / Interest-Rates / US Bonds
By: Alasdair_Macleod
This year has seen some big losses develop in the bond markets, though prices have stabilised in recent days. The chart above is of the yield on the lowest investment risk in ten year maturities. Most other 10-year bonds have seen even sharper rises in yield (i.e. greater price falls). This matters because the banking system is heavily invested in sovereign bonds, not only in the short end of the market where it traditionally invests its liquidity, but also in longer maturities between five and ten years. Furthermore, central banks have become exposed to the same risk through their bond purchases with implications for currency stability, but that is a separate issue.
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Friday, June 19, 2015
Big Fat Greek Bank Run - Greece Banking System Could Collapse Monday 22nd June / Interest-Rates / Eurozone Debt Crisis
By: Nadeem_Walayat
It appears times up for the Greek Trojan Horse that has been parked outside of the European Central Bank for years, slowly but steadily bleeding the euro-zone dry of now in excess of Euro 360 billion (E240 billion bailout + E120 billion banking system support), as the euro-zone bureaucrats and politicians are finally starting to understand what many have understood for the past 5 years that Greece just cannot function within the Euro-zone, it should never have been allowed to join with bogus economic statistics and subsequently should not have been bailed out again and again and again.
Thursday, June 18, 2015
Bond Bubble - The Fed is Now Officially in VERY Serious Trouble / Interest-Rates / US Bonds
By: Graham_Summers
The market action of the last 24 hours can be summated as thus:
The Fed didn’t raise rates, so the US Dollar fell and all risk rallied hard.
The fact the Fed didn’t raise rates is not important. Interest rates have not been at zero for six years. And the last real period of tightening ended in 2006, nearly a full decade ago.
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Thursday, June 18, 2015
GREXIT - Greece Wants to Become Scotland, Seeks Permanent Subsidy from Euro Tax Payers / Interest-Rates / Eurozone Debt Crisis
By: Nadeem_Walayat
The Greece debt crisis is marching towards its end game of GREXIT, as the socialist Syriza government continues to up the anti every other day by threatening to blow a hole in the euro-zone through defaulting on overdue debt payments that now total Euro 1.6 billion, having already delayed payment of for several weeks through the use of the euro-zone rule book as Greece demands bailouts forever to permanently service Greece's debt AND finance government deficit spending.
Thursday, June 18, 2015
UK Jobs, BoE, Sterling and Yield Spreads / Interest-Rates / UK Interest Rates
By: Ashraf_Laidi
Today's UK jobs figures powered the pound across the board as average weekly earnings growth (excluding bonuses) shot up to a six-year high of 2.7% in the three months to April y/y, exceeding market expectations for a 2.1% rise. Substracting the 0.1% level of inflation, real earnings come in at 2.6%, also the highest since 2009. If wage gains persist on their upward trend, then wage cost inflation would follow, forcing the gilt market to price more aggressive expectations for a BoE rate hike.
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Wednesday, June 17, 2015
Geopolitics Will Trump Economics in Greece / Interest-Rates / Eurozone Debt Crisis
By: John_Browne
Based on the continued failure of the negotiating parties to make any substantive progress in the talks over Greek debt payments, the financial world is tied up in knots over a possible Greek exit from the European Union. The uncertainty has manifested in both high and low finance, with a sharp sell-off in bonds, particularly EU and Greek government debt, and heightened retail withdrawals from Greek banks as depositors become wary of capital controls that would be imposed in the case of an exit. All concerned parties should likely breathe easier. Despite Greece's almost complete lack of financial integrity, neither NATO nor the EU can afford the political cost of a Greek exit from the EU.
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Wednesday, June 17, 2015
Global Bond Market Crash Could Be “Ground Zero” for the Biggest Financial Crisis Ever / Interest-Rates / Bond Bubble
By: ...
MoneyMorning.com Shah Gilani writes: Let’s start with a surprising truth.
Though not many folks know this, the credit crisis-spawned stock market crash of 2007-’09 created a hefty number of millionaires
There’s a reason for this, and that reason sits inside the simple market maxim that every crisis is accompanied by big opportunities.
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Wednesday, June 17, 2015
Let’s Just Get This Greece Thing Over With / Interest-Rates / Eurozone Debt Crisis
By: John_Rubino
Guys, please. As much as we all love a good crisis, this is getting old. The threats, the name-calling, the apocalypse certain to occur if one side doesn’t immediately cave to the other’s unreasonable demands. Seems like your Greek tragedy has been going on forever, and like a long-running TV show that keeps pushing the big reveal into the next season, your audience is beginning to lose interest.
Or is that the goal? Exceed our attention span, send us off to more vibrant stories like Russia or ISIS or Caitlyn Jenner — and then, when no one is looking, hit us with something really crazy. By now, that possibility is all that’s keeping us tuned in.
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Wednesday, June 17, 2015
Stop the Fed!? / Interest-Rates / US Federal Reserve Bank
By: Axel_Merk
We are concerned the Fed causes both economic and political stability to deteriorate. And, no, this is not about discouraging the Fed to hike rates. This analysis is about pointing out that the road to hell may be paved with the best of intentions. For the economy to prosper, we need a re-thinking not just at the Fed, but also with some Fed critics. Let me elaborate...
Tuesday, June 16, 2015
Why the Fed Is Afraid To Raise Interest Rates / Interest-Rates / US Interest Rates
By: Michael_Pento
Even though the major stock market averages are flat for the first six months of the year, by nearly every measure the stock market is still extremely overvalued. This point is not lost on Ms. Yellen and company, as the Fed Chair herself has recently assented that the current value of stocks are "quite high". Given this, the Fed must privately be afraid that even a small change in the Fed Funds Rate could serve as the needle that pops the massive bubble in the stock market.
Monday, June 15, 2015
Monetary Quackery in Ireland / Interest-Rates / Credit Crisis 2015
By: Antonius_Aquinas
If Ireland is ever going to leave PIIGS status (the acronym for Europe’s most indebted and financially challenged economies – Portugal, Italy, Ireland, Greece, Spain), it must stop listening to, and then criminally prosecute the monetary authorities which have brought the country to financial ruin. It can start this most necessary process with the nation’s central bank governor, Patrick Honohan. Not only must Professor Honohan be hauled away, preferably in chains, but the sinister institution in which he heads, Ireland’s central bank, Banc Ceannais na hÉireann, must be eradicated.
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Monday, June 15, 2015
Bond Market Bombshell - Deflation Rules! / Interest-Rates / US Bonds
By: Clive_Maund
DEFLATION RULES! - because periodic recessions, necessary to rebalance the economy after periods of growth, cannot be put off forever by the short-term expedient of printing money. The result of such corrupt and evasive practices is that the deflationary forces build up to catastrophic and overwhelming proportions leading to economic collapse and depression. This is the point that we have arrived at now. Why can't governments keep the game going indefinitely by printing more and more money? - because the debt grows and grows until it becomes apparent even to dull-witted bond / Treasury holders that they are never going to get their money back, so they start selling and the selling snowballs into an avalanche, driving interest rates through the roof. Bond and stockmarkets crash and the economy sinks into a dangerously deep depression, all because governments stubbornly refused to do the right thing all along, and interfered with and obstructed normal market forces, culminating in their idiotic and ruinous QE, ZIRP and now even NIRP.
Saturday, June 13, 2015
What You Really Need to Know to Play Rising Rates and Win / Interest-Rates / US Interest Rates
By: ...
MoneyMorning.com Keith Fitz-Gerald writes: Millions of investors are understandably flummoxed by the prospect of rising rates, and with good reason – it’s something that they’ve never had to contend with because interest rates have been on a one way trip down since 1981 when they peaked above 15%.
Naturally, Wall Street’s hype machine is in full gear and the headlines are terrifying. For every one telling you this isn’t a big deal there are 10 telling you it’s the end of the financial universe as you know it.
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Saturday, June 13, 2015
The Future of Greece and Gold / Interest-Rates / Eurozone Debt Crisis
By: Arkadiusz_Sieron
What are the possible scenarios for Greece and what do they imply for the gold market? The base-case scenario is that a bailout deal will be reached in coming days since no one wants the Grexit. Without the agreement, Greece would lose access to its external funding (like current bailouts funds, Eurozone’s crisis fund, IMF’s support or ECB’s Emergency Liquidity Assistance), whilst creditors risk Greece’s default, financial contagion and the loss of the euro’s prestige. However, both sides took tough positions, since Syriza does not want to disappoint its voters and does not believe in austerity policy, especially during recession, while creditors believe that the Eurozone is immune to possible Grexit. It is true that Greece and its creditors can only play the game of chicken to negotiate the best agreement and save face before their respective voters, but at this point, any mistake in negotiations can trigger a new crisis in Europe and increased volatility on the forex market. Read full article... Read full article...
Thursday, June 11, 2015
Is The Age Of Negative Interest Rates Ending Already? / Interest-Rates / International Bond Market
By: John_Rubino
History teaches that long trends end only when everyone is finally convinced that they’ll keep going.
Maybe no trend in modern times has been as convincing as interest rates. The yield on long-term Treasury bonds, for instance, has been falling for as long as most people have been alive:
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Wednesday, June 10, 2015
How to Play the Bond Market Crash / Interest-Rates / International Bond Market
By: ...
MoneyMorning.com Shah Gilani writes: A week ago, in a strategy piece detailing ways to handle the looming bond-market crash, I recommended shorting the iShares PLC Markit iBoxx Euro High Yield Bond ETF (LON: IHYG).
Several readers wrote in to say that “not every brokerage lets you buy this.” Some do, in fact: In this day and age, many brokerages let you buy any shares, anywhere. But for those of you whose brokerages won’t let you, I wanted to give you an alternative.
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Monday, June 08, 2015
Get Ready for the Greatest Trade in History / Interest-Rates / International Bond Market
By: ...
MoneyMorning.com William Patalon writes: In Wall Street lore, it's known as the "Greatest Trade Ever."
It's also known as "The Big Short."
In 2006, John Paulson was a relatively unknown hedge-fund manager – just another face in the crowd.
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Saturday, June 06, 2015
Greece’s Current Debt Problems / Interest-Rates / Eurozone Debt Crisis
By: Arkadiusz_Sieron
Greece is again on the brink. Hellas stood on the edge for the first time in spring 2010. In May 2010 the European Union and International Monetary Fund approved the first bailout worth €110 billion, under the condition of austerity measures. The first rescue package missed its targets as lenders’ economic forecasts for Greece were too optimistic. Therefore, in February 2012 the Troika (the Eurogroup, the European Central Bank and the International Monetary Fund) finalized the second rescue package worth a €173 billion (including money left over from the first bailout) provided by the newly created European Financial Stability Facility. Read full article... Read full article...
Friday, June 05, 2015
US Jobs Report Gives Green Light for a Interest Rate Hike? / Interest-Rates / US Bonds
By: Anthony_Cherniawski
Good Morning!
TNX is back in the news this morning with a huge spike in yields. The monthly Jobs Report came out much better than expected. Never mind that the vast bulk of those jobs was fictitious, AKA the CES Birth/Death Model. This gives the Fed the green light to hike rates, er…to follow what the market is already doing with the rates. This is an awfully tight corner for the Fed to be in.
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