More debt
June 24, 2024
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–Relatively quiet session Friday with yields little changed. Tens ended up half a bp at 4.255%; the TYU4 contract pinned the strike with a settle exactly at 110-16. There were a couple of large trades targeting lower yields: New buyer 80k SFRH5 9675/9775cs for 4.75, settled 4.5 ref 9546.5 (unch’d). New (adding) buyer of 50k TYQ4 111.5c, settled 27 vs 110-16.
–PCE prices released on Friday, with yoy expected 2.6% from 2.7 last and Core expected 2.6% from 2.8 last. Today’s news includes Dallas Fed Mfg expected -15 from -19.4. Daly speaks on the economy at 2:00pm. 2/5/7 yr auctions beginning tomorrow. Biden/Trump debate on Thursday evening. First round of French vote on June 30.
–Apart from the voracious borrowing appetite of the Federal Gov’t, Credit Bubble Bulletin excerpted this clip from BBG:
June 20 – Bloomberg (Joe Mysak): “The municipal bond market this week soaked up a record 27th deal of $1 billion or more, with overall borrowing accelerating at a torrid pace. Debt sales are being driven in part by a decline in borrowing costs over the past few weeks… Top-rated borrowers can borrow money for 10 years at about 2.80%… That’s down from 3.09% at the end of May. The previous annual record for so-called mega-deals was in 2020, when 26 were sold, totaling $46.49 billion… Through Wednesday, 27 muni megadeals totaling $42.96 billion have been sold. So far this year, states and localities have sold $221.4 billion in long-term debt, 42.8% ahead of last year’s pace.”
–Clearly, $221 billion doesn’t seem like much any more, but corporate borrowing is also accelerating. Debt time bomb.
