Limit Up! 8th January 2025
Overnight
Equities closed lower and BTC was smashed as treasury bond yields begin to get alarmingly high and Trump's press conference was both confronting and confusing.
US treasuries tanked with yield approaching 4.75%. In October 2022 yields hit 5% and markets went illiquid. Recent comment from primary dealers suggest that no-one is too keen to see that 5% again. The treasury buy-back was 5x oversubscribed as dealers took the opportunity to offload off-the-run stock to where they came from.
Breaking
Foreign Exchange
The dollar was higher, following yields, but still relatively subdued. We're all waiting for markets to break one way or another.
Equities
The Hang Seng and other Chinese exchanges are struggling to keep the index price above where stimulus started.
Bonds
30 year JGB yields highest since 2011
Commodities
Crypto
Having eluded the head and shoulders breakdown, BTC suffered a bearish outside reversal. Short term we may test the scene of the crime breakout now at approx 87,000.
Interesting
Indonesia joins Brics as newest full member, Brazil foreign ministry says [South China Morning Post]
Magellan co-founder Chris Mackay lambasts private credit in tirade [AFR]
An interesting dynamic in the corporate bond markets: On the one hand, there is a rush of issuance by companies, including (per Bloomberg) “Europe see[ing] more issuers than ever in [a] single day” – this as corporate treasurers look to prefund/refinance ahead of greater macro uncertainty and amidst some of the tightest spreads in three years (chart). On the other hand, investors are keen to buy the bonds, attracted by some of the highest “all in yields” in quite a while. This dynamic holds together as long as credit-related risks remain well-contained.
Eurozone inflation is ticking up. Maybe France isn't but Germany definitely is
Released on Monday
Released on Tuesday
US
Australia
Economic Indicators Today
US ADP Employment and Jobless Claims today instead of Thursday holiday
FED's Waller speaking