Discover and read the best of Twitter Threads about #bonds

Most recents (24)

What’s happening to #Tech stocks and the markets in September 2020 and what is #FED really worried about - is the #Equities or #Bonds ?

Markets never work in a straight line up or straight line down , every market has to go through a period of correction/consolidation to resume
its journey

NASDAQ was a overbought market in June to August 2020 , but we are not in any serious trouble to disturb the long term bullish trend and why ?

Because Credit Market hasn’t broken down yet , while the media and investors are focused in the Equity markets ,
it’s the BOND MARKET WHICH FED IS MORE WORRIED about

The QE program was more about buying

1) US Sovereign bonds, called Treasuries

2) US Municipal Bonds

3) US Corporate Bonds
Read 11 tweets
(1/THREAD) Sentiment: One might think, with the #market erasing all its losses, that sentiment would have gotten somewhat lopsided, but it hasn’t. Here, flows into equity funds & ETFs & money market funds. #equities #SPX
2/ The rush into #cash has barely been undone, while #investors aren’t exactly rushing into #equities. While cash sitting in money market funds has dropped slightly from nearly $5 trillion to about $4.55 trillion, it has fallen from 17% to 13% as a percent of equity market cap.
3/ Looking at the percent of equity market capitalization is probably a better way to slice the data as a proxy for sentiment and it has matched almost perfectly the spread on high-yield corporate #bonds. The rest of the sentiment picture is mixed too.
Read 8 tweets
So biggest casualty of #Fed warning on #US #economy y'day, was #Gold,which dropped 3% to $1951.90 an ounce,within minutes of #FedMinutes

Silver too fell below $28

Rout was not limited to precious metals--#Nasdaq sold off despite #Apple hitting $2 trillion market cap

#Covid_19
#CrudeOil whipsawed in tight range with #WTI at $42.83

#Fed's take on economic downturn was nothing new&yet markets collapsed

Only asset which saw aggressive buying was US #Tbills,with 10 yr #bond #yield@ 0.665% Vs previous close of 0.685%

#Dollar had its best day in 2 months
So what does y'day's frenzied buying in #bonds indicate?Is the #RiskOn trade over?

Well,not quite--With $9 trillion of excess global #liquidity sloshing around due to coordinated Central Bank rate cuts,since #Covid_19, equities will move up,albeit with severe bouts of volatility
Read 7 tweets
#China stocks roar on, with #CSI300 up ~20% in little more than a week as (official) #margin debt climbs Y150bln to touch Y1.3 trillion - levels only seen in the peak months of 2015's madness.
Worth noting a rejection here could mean the Jan'19 formation is complete.
#SHFE #SHSZ
As the money floods into #China #equities, #bonds bear the brunt. Wealth Managers are the MOMO traders de jour "Our company's mixed products can have 60% allocations to #stock, but now we're at 70-80%. This is a normal phenomenon [sic]," said one.

#SHFE #SHSZ
This latest burst has also spared #CNY the ignominy of setting a new 12-year high above 7.18, instead pushing it briefly back through the talismanic 7.00 parity. Ergo, either locals are repatriating to get in on the action or Johnny Foreigner is being sucked into the move.
#FX
Read 14 tweets
1/Thanks very much to my old friend @steve_sedgwick @SquawkBoxEurope for the chat this morning
2/We looked at #Growth v #Value, the #US v ROW, we touched on #bonds and borrowing, #money supply, #inflation, #lockdown, #commodities & #gold - all in under 10 mins!
3/If that was all a bit rushed, here follow the notes I sent to accompany our chat:-

#macro, #markets
Read 12 tweets
1/5. Li Xunlei, Chief Economist at Zhongtai Securities, predicts that among all types of #assets, #bonds and #gold are more likely to continue their price hikes this year:

new.cf40.org.cn/uploads/202007…
2/5. For bonds, it's because the yield rate of bonds will inevitably decline as the sluggish economic growth pares down investment returns amid this long-term global #recession.
3/5. #China's Government Work Report stressed to "promote steady reduction of interest rates", which indicates further interest rate cuts in the second half of 2020. The prospering bond market in the US and Europe have also added to the possibilities of a boom of bonds in China.
Read 5 tweets
1/ Financial markets have been the cornerstone of capitalism’s success – efficiently allocating scarce capital to the best businesses. Private enterprise was disciplined to ensure returns to attract capital. Markets worked.

#bonds #equities #markets #economy #investing
2/ The private sector proved vastly superior at generating wealth than government bureaucracies which squandered it, and the relative failures of command and control economies from Russia to France highlighted just how attractive market economies could be.
3/ Over the last few months of coronavirus, we’ve seen the complete breakdown of the financial markets as efficient allocators of capital. They have become little more than parasites, feasting on government bailouts and central bank QE Infinity programmes.
Read 10 tweets
I receive many questions regarding various financial dealings & their Islamic Rulings especially in light of my Master's connection to Liquidity Management & my PhD's connection to Risk management. I will answer these questions in this thread IA. #invest #money #Islam #Banking
#Options- Impermissible- as any transaction with ambiguous outcomes due to betting on the likelihood of a future event, and considered to be a 'zero-sum' transaction, in which one party can only financially benefit from the trade; are impermissible in Islam.
In terms of a zero-sum transaction, the above tweet should read: "in which one party can only financially benefit from the trade at the expense of the counter-party".
Read 12 tweets
Let me summarise an article by @FNBSA on Bonds in a thread;

Equity market instability and low cash interest rates have left savers and investors, both locally and abroad, taking another look at government bonds as a potential area of investment. #Bonds
Government bonds are a popular fixed income instrument; they are generally less volatile than equities and offer higher yields (interest rates) than cash. We look at how government bonds work and how to gain access to this asset class. #bonds
What is a government bond?

A government bond is a debt instrument issued by a government to support state spending and obligations. Essentially an investor is lending money to the government and in return receiving interest on that loan. #bonds
Read 21 tweets
PAUL TUDOR JONES
on
Gold Bitcoin 2020s
THE GREAT MONETARY INFLATION
by Paul Jones & Lorenzo Giorgianni (10 pg, tweet thread)

Re: #Gold $Gold $GC_F $IAU $GLD $PHYS & #Bitcoin $BTC #BTC $USD
Our collective Debt Addictions & Obviously Fiat Currency Expansion is a Hard Habit to Kick
Read 12 tweets
A short coverage of CFD trading markets and how it all began. How Contracts For Difference managed to become so popular and now available in the most of the countries for retail traders and investors?
#cfds #investing #trading #cfdtrading
cfdspy.com/guide/cfd-intr…
(it is a thread) Image
As most would guess, CFD trading started in the City of London in the early 1990's as a type of margined equity swaps. At first, they were only available to institutional traders and investors such as hedge funds.
Leverage and no UK stamp duty made it happen.
Late 1990's and Contracts For Difference were finally introduced to the retail traders, first in the UK and in early 2000's to all retail traders around the world.
Once again the leverage played a vital role in growing popularity.
#Leverage #CFD
cfdspy.com/leverage/cfd-l…
Read 5 tweets
Though it hardly needs to be said, there are few historical precedents for us to look to that are truly comparable to recent #Fed policy moves. The 2008/09 #GFC is an obvious analogue, but the pace and extent of #policy moves is even eclipsing that.
Another potential point of reference is the Second World War when, following Pearl Harbor, the @federalreserve pledged that it would be: “prepared to use its powers to assure at all times an ample supply of funds for financing the war effort.”
That stance, in effect, left the @federalreserve’s System Open Market Account’s (#SOMA) size at the mercy of #Congress and the Administration, which is a clear example of the #Fed doing “whatever it takes” to prevent unwanted increases in #yields to fund #fiscal crisis response.
Read 7 tweets
Yes, some (mostly speculative) #credit has been extinguished - *POOF* - and hence security prices have reverted to a level closer to what would be paid by those investing actual saved funds - i.e., capital. Is that a BAD thing? (Caveat: fear-driven overshoot is inescapable) 1/x
However, most of that underlying financial capital still exists (albeit with the notional gains of the past several months -arguably a largely ‘fictional’ overlay- extinguished). The bulk of it, however, remains in existence, even now. 2/x
What is understandably lacking is the will, the confidence, to employ it. Hence the rush to but ‘safe’ government securities as a default, leading to further distortions in pricing (and encouraging a further, damaging nationalisation of capital) 3/x
Read 13 tweets
Prioritising Equity over AT1 bond holders in #YesBank draft resolution is a first in this country!
In all fairness @RBI is setting up a bad precedent for the bond industry by subverting their rights. Critical takeaways:
1) Scares away a potential source of capital for all banks
2) Existing AT1 holders will start dumping their stock in fear of similar subversion in future as well.
3) This can lead to a potential escalation in yields. Raising Cost of capital in future for other players
4) There have been cases of PSU bank mergers previously as well
But never have AT1 bond holders suffered like this. Even the interest payments were not missed, leave aside capital being eroded.
5) Completely marking down the value to zero and keeping equity at 10Rs is not a legally tenable course of action.
Read 6 tweets
Lets talk about #Argentina and the #IMF. Specifically, lets talk about the biggest IMF #Bailout in #History...
Before we start talking about #Argentina & how the #IMF has extended to them a #Bailout that is by far the biggest in the organisation's history, let us first appreciate what the functions of the IMF are...
The #IMF’s main goal is to ensure #stability of the #international #monetary & #financial #system. It helps resolve crises, and works with its 189 member countries to promote #growth & alleviate #poverty...
Read 12 tweets
Lets talk about John Maynard #Keynes and his #Passion for #Art...
John Maynard #Keynes is perhaps most famous for his 1936 Magnum Opus, The General #Theory of #Employment, #Interest, and #Money in which he argued for a more active role of #FiscalPolicy in #Macroeconomic management...
It is hardly disputable that #Keynes' work, and his subsequent roles during the #BrettonWoods era marked a significant intellectual shift in the way we have come to understand #Economics as a discipline...
Read 11 tweets
I've written on this few times before, but I just cannot help it.

It's truly strange how analysts and economists keep making predictions about "stable growth", while we've been in constant state of central bank induced bailouts for over two years.

Why the complacency? 1/
The first two bailouts are not generally acknowledged, but they were important.

In November 2017, the BoJ and PBoC stopped the rout in the junk bond ETF:s that threatened to spread to the asset markets.

This went mostly unnoticed, like the following bailout. 2/
@GeoffCutmore
In March 2018, the #ECB was forced to bailout European corporate debt markets that became clogged due to over-issuance, as corporations were preparing for the end of QE and rise in interest rates.

The BoJ also participated by increasing its stock ETF purchases. 3/
@oliviabvoz
Read 10 tweets
How can fiscal policies help stabilize the economy for #China amid economic slowdown and #trade uncertainties? It is to maintain stable growth of broad credit to stabilize aggregate demand, according to cf40 senior fellow Zhang Bin:
cf40.org.cn/uploads/ZB2019…
Broad credit is the sum of the debts of residents,businesses and governments in an economy, usually in the form of loans and bonds. Broad credit changes are not only related to the increase and decrease of debt,but also to financial asset changes, such as bank deposits and bonds.
Corporate credit growth has slowed under the pressure of structural transformation,and breakthroughs in the near future seem unlikely.Thus, government spending will be critical to maintaining broad credit growth and the country’s macroeconomic stability for a considerable period.
Read 6 tweets
India MPC - Initial thoughts
1. No cut was a surprise. I had gone in with 35!
2. Looks like the RBI listened to the market which has been saying that further cuts will not help revive growth.
3. Clearly RBI is satisfied with transmission - 137 in call money and 218 in CPs! /1
India MPC - Initial thoughts
Contd.

4. Inflation per RBI seems a much greater risk than the market sees it. H2 revision from 3.5-3.7 to 4.7-5.1 is massive!
5. Growth revised down from 6.1 to 5 but there is belief that whatever the govt is doing to revive growth is /will work /2
India MPC - Initial thoughts
contd

Bonds have expectedly sold off more than 10 bps. Expect 10 yr to settle around 6.50%. Rupee seems unchanged at 71.57 and Nifty is holding above 12k.
/3
Read 4 tweets
#Moodys has pulled down its growth forecast for FY19 to 5.8%. Only surprise is why it’s not even lower. In the past year growth has collapsed from 8% to 5%. /1
@threadreaderapp

#India #CPI #GDP #RBI #bonds #inflation #ratecut #NBFC #jobs #credit #NPA #NCLT #growth
On the other hand #CPI is now at 4.6%. The laxmanrekha of 4% has been breached. A mix of drought, floods and unseasonal rain is driving food prices up. Core #inflation continues to fall to 3.7% reflecting the slowdown. /2
#India #GDP #RBI #bonds #ratecut #NBFC #jobs #credit #NPA
The wisemen and women of the economy have only one mantra - Cut, Pray, Hope. When in doubt cut rates.135 bps done but transmission is limited. We are told don’t look at nominal, real rates are still high. A single large cut is required. /3
#India #CPI #GDP #RBI #bonds #inflation
Read 16 tweets
India's Bond market is both growing and contracting at the same time. Here's the how and why: (1/n) #bonds #Debt #Banking #StateofIndia
In value terms, bond market (outstanding value of corporate bonds), has grown at around 8.5% YoY in the first half of FY20. That is a slowdown from ~12% growth in FY19, but it is still growth. And overall credit growth in the economy itself has slowed. (2/n) #bonds #StateofIndia
In volume terms though the bond market (outstanding issues of corporate bonds) has been declining for 7 consecutive quarters. The number of outstanding issues are down almost 10% from the peak in September-2017! (3/n) #bonds #Debt #Banking #StateofIndia
Read 9 tweets
Jetzt #Schattenmacht #BlackRock im #ZDF.
Um 00:45 morgens.
Werden sicher wenige sehen.
#Merz & die 1% wird es freuen!
2. #BlackRock currently has just under US$7 trillion under management & with #Vanguard they control two thirds of all #ETFs.

Now if BlackRock decides to sell a bigger share because the market turns you can quickly get a "run for the exit", A RUN!

#Markets #Stocks #Merz
3. #BlackRock has major shareholdings in many of the global Top 500 companies.

In Germany BlackRock is a major shareholder in ALL #DAX-companies!

#Stocks #Markets #Merz #CDU
Read 12 tweets
After the buildup and the crash-course in my last post, here is my post analysing Promoter Financing market in India. The analysis attempts to explain the slowdown in promoter financing in India and brings out some interesting facts. Read on to know more. Thread 1/12
As per BSE data, the aggregate value of promoters' pledged shares was ~1.85 lakh crore as at Aug 23, 2019. In comparison, the value of promoters' pledged shares stood at ~Rs 2.5 lakh crore as at Aug 30, 2018. The fall in pledge levels indicate slowdown in promoter financing. 2/12
An ET article (July 22), observed that 'pledging of shares by promoters of NSE companies dropped to a six-year low'. Another ET article (Aug 15), noted that 'interest rates on loans against shares (LAS) have surged by about 300 basis points in the past 3 months'. 3/12
Read 18 tweets
Germany, yesterday, issued a 30-year bond that offers negative yield (average yield of -0.11%).

This typically means that investors are paying German government to hold their debt. Why would investors invest in such a bond? Thread 1/8
The coupon set on these bonds (or Bunds, as they are called in Germany) is 0% i.e. the government will not pay any interest at all on these bonds.

In comparison, if GoI issues a 30 year bond today, the interest rate offered would be ~7%. 2/8
A negative yield of -0.11% means that an investor in this bond will pay 11 basis points per year to German Govt to borrow the sum i.e. an investment of Rs. 100 in these bonds would yield ~Rs. 97 in 30 years, a loss of ~Rs. 3. 3/8
Read 13 tweets

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