Going Nuke-ular
December 27, 2023
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–Quiet session in rates on Tuesday. Front end weakness probably related to bill and 2y auctions. Curve flattened as longer dated maturities saw marginal drops in yield. SFRM4 -4 at 9546.5. SFRM5 +1 at 9672.5, SFRM6 +2.5 at 9684.0 and SFRM7 +2.5 at 9675.5.
–On the treasury curve, the long bond is gravitating toward 4%, (4.043% at futures settle), while 5s and 10s are comfortable around 3 7/8%, (3.875% and 3.886%). Five-year and two-yr FRN auctions today.
–CLG3 traded above $76/bbl yesterday, but is back around 75 this morning. Still a decent rebound from sub-70 early in the month. Perhaps of more interest is uranium (in a longer term timeframe). From Y-charts, price as of the end of Nov is 62.29/lb, having started the year around 40. In June 2007 it hit $136. Just a mention, as nuclear power seems to be ramping up. Reuters reports: ‘Japan lifts operational ban on world’s biggest nuclear plant’, though Tepco still needs local gov’ts to approve the re-opening.
–Below the uranium chart is an interesting excerpt from @WinfieldSmart. I haven’t verified, but SPX adjusted for money supply growth has never taken out the 1929 high.
