The US Bond Market has now been in a drawdown for over 5 years, by far the longest in history.
Source: Charlie Bilello
In case you missed it...
🚨 The U.S. tried to raise $58 billion and demand came in cold. Foreign demand hit a low, and big banks had to step up. This auction’s bid-to-cover ratio was 2.53. That means: for every $1 the government wanted to borrow, $2.53 was offered. Sounds healthy but what matters is who’s bidding, not just how much. Indeed, foreign buyers took 54%, their lowest share in over a year. So if foreigners are stepping back… who’s stepping in? U.S. investors (directs) who took 28% near record high. That means that US Pensions, insurance companies, and hedge funds are the ones who filled the gap. Big banks got stuck with 18%, which is not great. Despite the weak 3-year demand, the 10-year yield didn’t move much staying around 4.20%. Why? Because the market already expected this weak auction. And everyone’s watching the Federal Reserve instead. But if auctions continue to be on the weak side, things might start to become more difficult for the US Treasury, especially on longer maturities. Source: StockMarket.News on X
It is hard to see gold and other store of values as a bad long-term investment with Money Supply exploding all across the world!
Source: Andrea Lisi
Foreign Investors now own $2.5 Trillion more in U.S. Stocks than U.S. Debt, the widest gap ever
Source. Barchart, BofA
This is a GLOBAL DEBT CRISIS: Japan’s 40-year bond auction just saw its weakest demand since 2011.
The bid-to-cover ratio fell to 2.127. Yield surged to a record 3.375%. Cracks are forming in the world’s 3rd-largest bond market. Source: Bloomberg, Global Markets Investor
Japan’s 10y bond yields have jumped to their highest level since 2008, driven by growing fiscal concerns.
The spike came after President Trump announced a trade deal w/Japan. It appears Japan may be covering part of the cost of US car tariffs by using its own investment funds–essentially a partial bailout to smooth the deal. Source: Bloomberg, HolgerZ
More than 80% of fixedincome assets yield above 4%.. income is back.
Source: BlackRock thru Mike Zaccardi, CFA, CMT, MBA
What a mess... 🤡
*TRUMP ON FED CHAIR POWELL: WE ARE NOT PLANNING ON DOING ANYTHING *TRUMP ON POWELL: WE GET TO MAKE A CHANGE IN 8 MONTHS US 2-year hashtag#yields bounced back after President Trump says his administration is “very concerned”, but “not planning on doing anything” about Fed Chair Jerome Powell. Source: CNBC, Bloomberg, HolgerZ
