Real yields are high
April 12, 2024
***************
–Relief rally in stocks but treasuries continued to trade soft late Thursday on auction distribution. USM4 settled 115-08 at 3:00pm but traded 114-31 just before the electronic close. PPI was slightly lower than expected, though anyone that cares to look can see that CLM4 has moved from 71 to 85 since the start of the year. BBG cited the Fed in a story noting that credit card delinquencies are at a record high, with 3.5% being at least 30 days late as of Q4. Can’t pay the juice.
–At the time of settlement rates were little changed though the curve steepened. Red SOFR contracts essentially unch’d but golds -2.625. Two-year down 1 bp to 4.95% while thirties were up 3 bps at 4.657%. Ten year inflation indexed note at 2.165%, a new high for the year. The high last October was 2.53%
–A headline from FT this morning: ‘Value of China’s exports falls sharply on sliding prices’. USDCNY 7.2373 and $/yen remains over 153 as both currencies continue to weaken, portending deflationary exports.
–JPM, Citi, WFC and Blackrock report today. Retail Sales and Tax Payment day on Monday.
