Mark Twain market
March 26, 2021
–Tens ended unch’d yesterday, though the curve steepened as a couple of late +TY vs -WN blocks went through (details below). 10/30 rose 2 bps to 72.1. Steepening also apparent in the back end of the dollar curve with the blue back +0.625 and gold pack -1.625 (blue/gold pack spread is directionally correlated with 10/30).
–Chart attached shows that the dollar index pierced the 200 day moving average with the potential for further gains. Stocks staged a surprising rally from early morning weakness.
–ZH has a story citing the Financial Times that Credit Suisse is considering using its own capital to reimburse clients who lost money ($3 billion) in funds related to the Greensill collapse. In the “history often rhymes” category, some might recall that in May of 2007, Bear Stearns injected its own capital in two collapsed mortgage funds. Stocks took a modest dip after that news, before going on to make new highs. So….everything’s fine. Rumors of my demise are greatly exaggerated.
–News today includes the Fed’s favorite inflation indicator, Core PCE prices, which are expected +1.5. On a month to month basis Personal income expected -7.2 and Spending -0.8.
–April treasury options expire today.
BLOCKS:
+8536 TYM 132-00 vs -2087 WNM1 183-29
+12506 TYM1 132-03 vs -3036 WNM 183-30
Below is a very loose reference to Mark Twain riverboat stories…
