First day of Spring!
March 20, 2023
–UBS ‘saves’ Credit Suisse. CS bondholders bailed in. New low crude oil around $65/bbl. The good news is that the SPR can be refilled at a reasonable price. The bad news is that the architecture of western finance is being destroyed. Win some, lose some.
–Ten year inflation-indexed breakeven to 10y hit new low 212 bps, an indication of lower forward inflation (low since 2021).
–Ten-yr yield ended Friday 3.38%, down 18 on the day and 30 on the week.
–All short-end one year calendars are negative, and falling. SFRM3/M4 -116, SFIM3/M4 (sonia) -56, ERM3/M4 -34.
–Recall the large buyer of SFRZ3 9550/9750cs for 33 to 35 on Feb 1 (Fed day)? He took some pain as that cs went all the way down to around 13. Settled Friday 73.25.
