Markets & Finance

The Treasury starts buying back its own debt

The US Treasury has begun its first regular debt buyback programme since the early 2000s.

The Fed slows its balance-sheet shrinking

The Federal Reserve said at its May meeting that it will slow its quantitative tightening (QT) programme from June.

How to spot Japan's secret yen buying

Japan's Ministry of Finance spent an estimated ¥9 trillion buying yen in two rounds of intervention, if the Bank of Japan's own current account projections are any guide.

Meta spends more, investors flee

Meta Platforms shares fell 10.5 per cent in a single session after first-quarter results that were, on the face of it, solid.

The market gives up on rate cuts

Bond investors started the year pricing six Federal Reserve rate cuts. They have now priced out almost all of them.

Bank profits hold up in a higher-for-longer world

First-quarter results from Wall Street's biggest banks showed how well they have adapted to high interest rates.

How far will Japan let the yen fall?

The yen has slid towards 151.8 per dollar, its weakest level in thirty-four years.

Japan raised rates. The yen fell anyway

The Bank of Japan raised interest rates for the first time in seventeen years, and the yen fell.

The Fed's banking lifeline expires

The Federal Reserve stopped making new loans under its Bank Term Funding Program (BTFP) on 11 March, closing the emergency facility it opened during the regional banking panic of 2023.

Capital One's real prize in Discover: the network

Capital One has offered $35.3 billion in stock for Discover Financial, one of the boldest bank deals since the 2008 financial crisis.

Office loans are going bad

Office loan delinquencies in commercial mortgage-backed securities (CMBS) have risen past 6.3 per cent, according to data from Trepp.

A hot inflation report hits short-term bonds

Headline inflation came in at 3.1 per cent in January and core prices rose by an uncomfortably hot 0.4 per cent on the month.

Super Bowl: Does football predict the bond market?

The Super Bowl Indicator holds that a win for an NFC team heralds a bull market in shares and an AFC win a bear market.

Lunar New Year: China's stock market can't escape falling prices

Chinese consumer prices fell 0.8 per cent in January from a year earlier, the steepest drop in fifteen years, and the country's stock markets enter the Year of the Dragon with little to celebrate.

The Treasury promises no more surprises

The US Treasury's February quarterly refunding statement was a small lesson in managing market nerves.

Banks pay the bill for last year's failures

America's biggest banks are paying the last of the bill for the regional banking panics of early 2023.

Banks borrow from the Fed to earn more from the Fed

Banks found a profitable arbitrage in an obscure corner of the Federal Reserve's plumbing.

Seven stocks, almost a third of the market

Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla now account for nearly twenty-eight per cent of the S&P 500's market value.

The Fed's money drain is about to get real

The Federal Reserve's quantitative tightening (QT) programme has taken nearly $1 trillion of government and mortgage debt off its books without upsetting the financial plumbing.

New Year: Markets want six rate cuts. They'll be disappointed

Forward markets start 2024 pricing in six quarter-point rate cuts, the first as early as March.

Boxing Day: The year-end squeeze in money markets

While equity investors enjoyed eggnog and a holiday rally, money market desks were dealing with the annual squeeze that comes with year-end balance-sheet reporting.

Christmas: Is the Santa rally real?

Wall Street greets the last trading days of December with talk of the 'Santa Claus rally', the statistical habit of shares drifting higher into year-end.

Japan is the last to keep rates below zero

Companies rush to borrow before rates fall

Borrowing conditions for American companies have improved remarkably in a few weeks.

The great bond rally

The ten-year US Treasury yield fell by more than 80 basis points in November 2023 from its October peak, ending near 4.17 per cent and pulling borrowing costs down around the world.

Black Friday: Retailers finally have the right amount of stock

Black Friday found American shops with tidy shelves, sensible stock levels and hardly any panic clearance sales.

Thanksgiving: Bond investors finally have something to be thankful for

The ten-year Treasury yield has fallen from its October peak of 5.02 per cent to about 4.40 per cent, handing bond funds large mark-to-market gains just in time for Thanksgiving.

Moody's warns on America's debt

Moody's Investors Service cut its outlook on America's Aaa credit rating from 'stable' to 'negative' on 10 November.

Are financial conditions tight or loose? Depends who you ask

Goldman Sachs' financial conditions index (FCI) says conditions have tightened sharply, thanks to high borrowing costs and a strong dollar.

Diwali: India's festive boom runs on credit

Car dealers, electronics retailers and jewellers across India reported record sales over Diwali, helped along by the fastest growth of any major economy.

The Treasury borrows less than feared, and bonds soar

The Treasury set its quarterly refunding at $112 billion, a modest total that put most of the future growth in borrowing into shorter maturities.

The Treasury blinks

The US Treasury said on 31 October that it would borrow $776 billion in the coming quarter, well below the $852 billion Wall Street had feared, and that it would lean more heavily on short-dated bills.

The bond vigilantes are back

A $24 billion auction of 30-year US Treasuries drew weak demand and had to offer a hefty yield concession to clear.

The 10-year hits 5%. Why now?

The ten-year US Treasury yield touched 4.99 per cent on 19 October, within a whisker of 5.0 per cent for the first time since July 2007.

China's hidden local debt problem

China's central government has allowed provinces to issue more than RMB 1 trillion of special refinancing bonds to deal with the hidden debts of Local Government Financing Vehicles (LGFVs), which are estimated at $9 trillion.

Banks' profit peak is here

JPMorgan Chase reported net interest income of nearly $23 billion for the third quarter, helped by high policy rates and its ability to pay depositors little.

After the Hamas attack, the rush to safety faded fast

Hamas's horrific attack on Israel on 7 October at first sent trading desks to the usual script for a geopolitical shock.

Strong jobs, falling bonds

Non-farm payrolls rose by 336,000 in September, nearly double the consensus forecast.

Long bonds are selling off for a new reason

The ten-year Treasury yield has broken through 4.55 per cent, a sixteen-year high, and the reason has changed.

How weak will Japan let the yen go?

The yen has slid toward 147 to the dollar, and currency traders are on watch for the Ministry of Finance to intervene.

Anniversary: Our first year, graded

This column began a year ago on a simple premise, that the steepest central bank tightening in forty years would sooner or later collide with private balance sheets.

Labor Day: The job market is cooling the right way

For eighteen months economic orthodoxy held that bringing inflation down would require a painful jump in unemployment.

Bonds finally pay more than inflation

Ten-year US Treasury Inflation-Protected Securities (TIPS) now yield more than two per cent, for the first time since the financial crisis of 2009.

China's prices are falling. Its currency could be next

Chinese consumer prices fell 0.3 per cent year-on-year in July, and the People's Bank of China now faces an awkward choice.

Why long bonds pay more — two very different answers

Ten-year Treasury yields have climbed toward 4.1 per cent, and fixed-income desks are arguing about why.

The Treasury needs more money, and companies will feel it

On 2 August the US Treasury raised its quarterly refunding to $103 billion, the first increase in coupon issuance since 2021.

America loses its AAA again. Does it matter?

Fitch Ratings cut the United States from AAA to AA+ on 1 August, an unwelcome reminder of the fiscal arithmetic.

Why banks are selling their best loans

Banks are selling high-quality corporate loans to private credit managers and other institutional buyers, when they might be growing their balance sheets or putting spare cash into yielding assets.

Is Japan about to loosen its grip on bonds?

The yen sits near 139 to the dollar and headline inflation is comfortably above target, and speculation is growing that Kazuo Ueda will loosen or scrap the Bank of Japan's yield curve control (YCC).

Banks passed the stress test. Now comes the real test

All twenty-three banks in the Federal Reserve's annual stress test passed in late June, showing on paper that they could survive a severe fall in commercial property prices and a global recession.