New Curve highs
March 28, 2025
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–New highs in many curve measures. For example 2/10 up to 37 bps (+4.5) and 5/30 at 63 (+3.0). 2/10 had printed higher in January at 42.3, but 5/30 has surpassed the high from last September of 61.4 and is highest since the very start of 2022. 2y (new) 3.996%, down 1.2 bps and 10y +3.3 bps to 4.367%.
–SOFR curve steeper as well, with new highs in deferred calendar spreads. For example, SFRM7/SFRM8 one-year spread settled 15.5 (9641.0/9625.5), up 2.0 on the day. These back spreads typically move slowly; on March 3, to start the month, it was 8.0. My interpretation is that term-premium is increasing and/or the market is concerned about forward inflation, and perhaps becoming less confident about Treasury being able to easily sell longer dated debt. Perceptions of a looser Fed going forward is another possible signal.
–Main news today PCE Prices: expected 0.3 with Core also 0.3 m/m. YOY expected 2.5 from 2.5 last, with Core 2.7 from 2.6. Truflation is running at 1.8%.
–Gold made a new ATH yesterday, and current GCJ5 is 3081.10, +20.10 to another new high. Spot silver high last year 34.90, currently 34.41.
–This may have little impact on the market in general, but CoreWeave expected to begin trading today. Interesting in that it’s an AI play, but the valuation has been ratcheted lower, not higher. So, from an earlier estimate of around $30 billion, it’s now $19b and NVDA was compelled to take this step:
“Nvidia will anchor the CoreWeave IPO at the price with a $250 million order [at $40], a person familiar with the matter told Reuters earlier on Thursday.”
X contributors like @JG_Nuke and @DarioCpx have been saying CoreWeave (& NVDA) have been using shady accounting to support valuations. Now we’ll get to see how it plays out in the public markets.
