Why British homeowners feel rate rises faster than anyone
Two-year gilt yields are climbing toward 5.5 per cent, their highest since 2008, and British homeowners are feeling it faster than borrowers almost anywhere else in the rich world.
Markets & Finance
A bull market built on seven stocks
The S&P 500 has risen twenty per cent from its October low, which by the market's arbitrary convention makes this a bull market.
The Treasury refills its account, and markets pay
The US Treasury is rebuilding its operating balance towards $600 billion, after running the Treasury General Account down to almost nothing to avoid breaching the debt ceiling.
Special Report
Memorial Day: The debt deal is done. Now comes the bill
Negotiators agreed on 27 May to suspend the debt ceiling, and Washington's political drama ended in its usual anticlimax.
Get ready for a flood of Treasury bills
Negotiators in Washington are edging towards a last-minute deal that would suspend the debt ceiling until 2025, and money markets are preparing for the hangover.
When does America run out of money?
Janet Yellen told congressional leaders that the federal government could run out of cash "as early as 1 June", turning the debt-ceiling standoff into an immediate problem for the plumbing of the financial system.
Why regional banks lost a third of their value
The KBW Regional Banking Index (KRE) has fallen by more than 35 per cent since Silicon Valley Bank failed on 8 March.
Markets start pricing an American default
The spread on one-year US sovereign credit default swaps (CDS) rose past 100 basis points in late April.
Special Report
Tax Day: What April's tax cheques say about the debt ceiling
Millions of Americans filed their federal income tax returns by 18 April, and money market desks on Wall Street spent the day doing sums of their own.
China is spending again. Its property market isn't
China's economy grew at a respectable 4.5 per cent annual pace in the first quarter, lifted by a sharp rebound in retail spending, restaurants and domestic travel after the end of zero-Covid.
The Treasury bills nobody wants to hold
Treasury bills maturing in April and May yield about 4.0 per cent. Bills maturing in early June, right in the window when the government is expected to hit its "X-date" and run out of cash, yield well above 5.5 per cent.
Watching deposits leave in real time
March payrolls rose by a healthy 236,000, but the Federal Reserve's weekly H.8 release showed deposits still pouring out of small and mid-sized banks.
First Republic has been rescued. It hasn't been saved
Eleven of America's largest banks deposited $30 billion of uninsured cash in First Republic Bank on 16 March, in a deal put together by JPMorgan Chase and Treasury Secretary Janet Yellen.
Savers flee banks for money funds
Assets in US money market funds (MMFs) rose past $5.1 trillion in March 2023, a record, after taking in more than $300 billion in a few weeks.
Are bank failures doing the Fed's job for it?
Emergency Fed lending to banks is approaching $300 billion, according to the central bank's H.4.1 release, and that has undone months of quantitative tightening in a matter of days.
The Fed's quiet bailout of banks' bad bond bets
Banks borrowed a record $152.9 billion from the Federal Reserve's discount window, according to the H.4.1 balance-sheet release published on Thursday, 16 March.
Explainer
How a bank run happens at the speed of an app
Depositors tried to pull $42 billion out of Silicon Valley Bank (SVB) in less than ten hours on Thursday, 9 March, more than a quarter of its deposits.
America's banks are sitting on $620bn of hidden losses
America's commercial banks are sitting on roughly $620 billion of unrealised losses on their securities portfolios, according to recent figures from the Federal Deposit Insurance Corporation (FDIC).
Could rates really hit 6%?
A few weeks ago, anyone who suggested the Federal Reserve might take the federal funds rate toward 6.0 per cent would have been written off as a scaremonger.
Private credit's borrowers are feeling the squeeze
The Secured Overnight Financing Rate (SOFR) now resets above 4.55 per cent, up from almost nothing a year ago, and private credit funds are paying their limited partners double-digit gross yields.
Special Report
Valentine's Day: Markets still love rate cuts. The Fed doesn't love them back
January's consumer prices rose at a 6.4 per cent annual pace, the Bureau of Labor Statistics said on Valentine's Day, and markets' eighteen-month infatuation with Federal Reserve rate cuts was once again shown to be one-sided.
Explainer
How the Treasury is quietly pumping cash into markets
Federal Reserve officials have spent the winter telling conferences that quantitative tightening (QT) is running at its full cap of $95 billion a month.
Special Report
Lunar New Year: China's reopening lifts the yuan
The yuan had a good Lunar New Year. Having flirted with 7.35 to the dollar in late October, the onshore and offshore rates rallied back toward 6.78, one of the fastest percentage recoveries on record.
Banks' easy profits are about to end
America's largest commercial banks reported record headline profits for the fourth quarter, lifted by a big rise in net interest income (NII).
Japan spends trillions to defend one number
The Bank of Japan has been buying government bonds at a record pace, more than ¥5 trillion in a day, to defend its new yield ceiling, and it now holds more than half of the entire 10-year JGB market.
Germany's bond shortage is finally easing
Two-year Bund swap spreads blew out towards 100 basis points at the height of the collateral squeeze in 2022, as traders paid steep premiums to borrow physical German government bonds.
Special Report
New Year's Eve: The year the classic portfolio failed
The classic 60/40 portfolio lost about 17 per cent in 2022, a historic drawdown that left wealth managers and pension trustees with nowhere liquid to hide.
Is the recession alarm broken?
The gap between 10-year and 3-month US Treasury yields inverted in late 2022 to depths not seen in four decades, pushing the New York Federal Reserve's recession probability model towards 38 per cent.
Special Report
Christmas: Why markets go quiet — and fragile — at year-end
Markets slow to a crawl in the last days of the trading year, and casual observers take that for calm.
The debt bill companies have pushed to 2024
US junk bond issuance struggled to pass $100 billion in 2022, the lowest annual total since the Lehman Brothers collapse in 2008.
Japan surprises everyone, and bonds everywhere feel it
The Bank of Japan unexpectedly widened the permitted trading band for 10-year Japanese government bonds from ±0.25 to ±0.50 per cent, and bond markets around the world shook.
The Fed and the market disagree. Someone is wrong
The Federal Open Market Committee raised its policy rate to a range of 4.25 to 4.50 per cent in December and published projections showing a peak of 5.1 per cent in 2023.
Has the dollar peaked?
The dollar has fallen from its September peak near 114.8 on the DXY index to around 105, after a historic rise through 2022 that neatly reflected diverging monetary policy and America's stronger terms of trade.
Special Report
Black Friday: Shop now, pay later, default sooner
US credit card balances reached $930 billion in the third quarter of 2022, according to the Federal Reserve Bank of New York's latest household debt report, up fifteen per cent on a year earlier.
The bond market is screaming recession
The gap between two-year and ten-year US Treasury yields reached minus seventy-five basis points in late November 2022, the deepest inversion since Paul Volcker was crushing inflation in the early 1980s.
Special Report
Halloween: The scariest year for bonds in memory
The US Aggregate bond index is heading for a loss of close to 15 per cent this year, which would make 2022 the worst calendar year for bond investors since the founding of the republic.
Meta's spending spree just cost it a quarter of its value
Meta Platforms' shares fell by twenty-four per cent on 27 October, wiping out eighty-five billion dollars of market value, after management said capital spending in 2023 would rise to between $34 billion and $39 billion.
Is the world's safest market becoming hard to trade?
On 12 October Janet Yellen said the US Treasury was worried about a loss of adequate liquidity in the government bond market.
Special Report
Diwali: India's gold habit is weighing on the rupee
The rupee has fallen past 83 to the dollar for the first time, and India's households are about to buy a great deal of gold.
Bond investors want to be paid for waiting again
The benchmark ten-year US Treasury yield pushed through 4.25 per cent in late October 2022, its highest since 2008, and with it bond investors have started asking to be paid for waiting again.
The Bank of England takes away the safety net
The Bank of England said on 28 September that it would buy up to £65 billion of long-dated gilts to stop a collapse among UK pension funds, and it promised that the backstop would end at 5:00 PM on Friday, 14 October.
Banks are stuck holding Elon Musk's Twitter debt
When Elon Musk signed a binding agreement in April to buy Twitter for $44 billion, Wall Street's biggest banks thought they had won the underwriting mandate of the year.
Japan is fighting the dollar. The dollar is winning
Japan's Ministry of Finance told the Bank of Japan to sell dollars and buy yen on 22 September, its first such intervention since 1998, and officials tried to draw a line near 145.90.
Britain learns the price of a budget nobody believed
On Monday, 3 October, the chancellor dropped the planned abolition of the 45p top rate of income tax, a retreat forced by the market's punishing response to £45 billion of unfunded tax cuts.
Explainer
How Britain's pension funds nearly broke the bond market
The 30-year gilt yield shot above 5 per cent in late September and sterling fell towards 1.035 against the dollar after the government unveiled a fiscal package with no funding attached.
