By John Swarr | July 6, 2017
Second quarter U.S. dollar (USD) interest rate markets were very unexciting when looking at absolute movements in both swap rates and Treasury yields. However, an interesting development arose concerning the relative movement between the 30-year points of these two curves that will likely have the attention of market participants through the end of the year. The 30-year swap spread – defined as the difference between the 30-year swap rate and 30-year Treasury yield – has widened (or become less negative) significantly since June 13th, when the Treasury released its recommendations for financial industry reform, including a proposal to remove U.S. Treasuries (USTs) from the denominator of the supplementary leverage ratio (SLR) calculation. This proposal would effectively make USTs “cheaper” for banks to hold from a capital requirement perspective.
By David O'Malley | January 9, 2017
2017 began with significant uncertainty surrounding the implications of the major geopolitical changes that happened during 2016. In the next few weeks, we will learn more from the British Prime Minister on the process to withdraw from the European Union. On January 20th, Donald Trump will be sworn in as the next President of the United States. The impact of these two changes in the global environment will most likely drive the course of markets during the year ahead.
By David O'Malley | November 9, 2015
I have written in the past that increasing wages would be a key indicator for the Fed to start increasing rates. The 0.4% increase in average hourly earnings this past month resulted in the highest year-over-year increase in the past twelve months.
By David O'Malley | April 13, 2015
Last week’s economic data, Fed minutes and New York Fed President William Dudley’s comments only added to the questions surrounding the strength of the economy and the timing of any increase in interest rates.
By David O'Malley | March 9, 2015
The markets reacted sharply on Friday to the stronger than expected payroll number, with stocks selling off, bond yields rising and the U.S. dollar strengthening.
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