Bloomberg 6/29/18
EGBs Flatten as Reuters Reports ECB Targeting Longer-Term Bonds
By James Hirai
Core EGB curves aggressively flatten after Reuters reports the ECB is considering buying more longer-term bonds from next year.
Germany 5/30y flattens 5bps, matching low on June 14, supported by aBuxl block trade Peripherals bull flatten as the report also mentions possible deviations from the capital key rule

(Bloomberg 3/9/18)
BFW 03/09 00:14 *CHUNG SAYS TRUMP, NORTH KOREA'S KIM WILL MEET BY MAY
BFW 03/09 00:12 *CHUNG SAYS NORTH KOREA WILL REFRAIN FURTHER MISSILE TESTS

(FT 3/6/18)
Hopes for North Korea nuclear accord lift sentiment
Agreement for talks with the south helps extend risk rally and boost the won

North and South Korea have agreed to hold direct talks between their leaders with Pyongyang signaling it is willing to abandon its nuclear programme if its security can be guaranteed.

The won is gaining 1 per cent at Won1,065.94 per dollar, its strongest level in 11 sessions.

The dollar index is slipping by 0.4 per cent to 89.726 and the euro is up 0.5 per cent at $1.2398, with the pound 0.4 per cent higher at $1.3889 The dollar tends to face selling pressure on positive geopolitical news, since its status as the world’s reserve currency gives it lingering haven characteristics.

Similarly, investors are reducing their exposure to US government debt, drawn by the prospect of stronger returns elsewhere, sending the yield on 10-year Treasuries back to 2.9 per cent for the first time in four sessions and up by 2.2 basis points. The yield was lower by a similar margin before the Korea news broke.

According to futures trade, New York’s S&P 500 will rise 0.5 per cent at Tuesday’s open, adding to a climb of over 1 per cent on Monday.

Bloomberg 5/15/17

Marco Rubio will be a ”yes” on tax bill, Fox says in Twitter post, citing unidentified person familiar.
*S&P 500, USD, UST YIELDS RISE AFTER REPORT ON RUBIO TAX VOTE
*USD/JPY FRESH HIGH 112.67 AS USD ADVANCES ON TAX OPTIMISM

(Reuters 12/4/17)

The dollar jumped on Monday versus the currencies of most other developed and emerging nations while Treasury yields rose and Wall Street was primed for a another record-setting day after the U.S. Senate voted to approve a wide-ranging tax overhaul.

Markets reacted broadly to the Senate’s approval on Saturday for the biggest tax law change since the 1980s, taking President Donald Trump closer to his goal of slashing levies on businesses.

European stocks rose more than one percent on average , with German stocks outperforming with a 1.4 percent surge, in anticipation of a strong New York session - futures for the Dow Jones, S&P 500 and Nasdaq indexes rallied as much as 0.9 percent .

(Bloomberg 10/16/17)

The dollar extended gains late Monday after economist John Taylor was said to make a favorable impression on President Trump during an interview for the position of Fed chairman.

* The Bloomberg Dollar Spot Index rose 0.3% as people familiar said Taylor impressed Trump, while the prospects of former Fed Governor Kevin Warsh faded.

(Bloomberg) -- Treasuries extended overnight losses, led by belly of the curve, pushing 5s30s through 87bp level; morning weakness was added to over afternoon session as report suggested that Fed chair candidate John Taylor made a favorable impression on Trump.

UST yields rose as much as 4.5bp, in 5Y tenor, shortly after the close; 5s30s flattened to 86.5bp, lowest level since 2007.

(Bloomberg 10/26/17)

The euro fell back to a 1.1700 handle vs the dollar and was lower against a majority of its G-10 peers after the ECB unveiled plans to extend its asset purchase plan until at least September 2018 at a pace of EU30b per month. EUR fell to the lowest since Oct. 6 at 1.1707 after Draghi’s press conference ended, extending losses that began after the decision was announced.

(Bloomberg 9/20/17)

Fed fund futures indicate odds of an additional rate hike by year-end have increased as the central bank kept its 2017 median fed funds forecast unchanged at 1.375%, implying that it still has room for one more rate hike.

* Odds of December rate hike currently ~60% from about 50% before the FOMC decision; fully pricing next rate hike around mid-2018; chances of one more hike by year-end have risen from as low as 22% since Sept. 8

(FT 9/6/17)

US stocks pushed higher and gold dropped following reports that US President Donald Trump has reached an agreement with Democratic congressional leaders on a short-term debt limit extension.

Reuters reported on Wednesday that Democratic congressional leaders had agreed with Mr Trump to pass Harvey aid along with a debt limit increase to December 15. Such a measure would also need support from Republicans, Mr Trump’s party, who control a majority of both the House of Representatives and the Senate.

The Dow Jones Industrial Average had climbed to a gain of 0.35 per cent at 21,828, while the S&P 500 pushed higher to 0.37 per cent increase for the day, at 2,466. The Nasdaq was up 0.25 per cent at 6,391.

(Bloomberg 6/29/17)
Euro at 13-Month High as Bulls See Opportunity in ECB Taper Talk

The euro rallied to the highest level in more than a year while a slump in German bunds deepened on speculation that the European Central Bank is edging closer to a decision to scale back monetary stimulus.
Europe’s common currency has strengthened against all but two of its major peers in the past week as President Mario Draghi said Tuesday that reflationary forces had replaced deflationary ones in the region. Yields on German 10-year bonds are headed for the biggest weekly increase since early March.
While the sharp currency and bond swings may have vexed ECB officials, prompting comments that markets had misinterpreted Draghi’s remarks, many analysts and investors remain convinced that this week marked a turning point in the outlook for euro-area monetary policy.

The shared currency rose 0.4 percent to $1.1425 as of 9:57 a.m. in London, taking its gains in the past five days to 2.4 percent.

(WSJ 5/24/17)
U.S. Government Bonds Strengthen as Fed Outlines Gradual Portfolio Tapering

U.S. government bonds strengthened Wednesday after the Federal Reserve suggested it would likely start reducing its bondholdings later this year in a more cautious manner than some had expected, while laying out early details of a proposed method for tapering the portfolio down.

Traders greeted the new details warmly after a long period of anticipation. The yield on the benchmark 10-year Treasury note settled at 2.266%, down from 2.285% Tuesday. Yields fall as prices rise.

(Politico 5/11/17)
HILL REPUBLICANS SAY COMEY WON'T SLOW TAX REFORM - MM checked in with several senior GOP congressional aides on Wednesday and their message on the impact of President Trump's firing of Jim Comey on prospects for finishing health care and moving on to taxes was the same: there won't be any.

Markets seemed to agree with Hill Republicans that the Comey firing alone won't mean that much. Stocks barely budged on Wednesday with the Dow finishing down just 33 points and the S&P and Nasdaq marginally higher.

(WSJ 5/11/17)
Oil Jumps on Confidence in OPEC Cuts
Crude futures gained on Thursday as investors became more positive that production cuts made by major oil producers are finally making a dent on global crude stocks.

Concern that these cuts weren’t reducing the global crude glut has put pressure on oil prices for several months. Oil prices hovered around five-month lows at the beginning of this week but have gained since data from the Energy Information Administration showed U.S. crude stockpiles dropped by 5.2 million barrels in the week ended May 5, far exceeding market expectations.

(Bloomberg 3/24/17)
BREAKING: Stocks sharply rebound after news that House pulled GOP health plan
USD/JPY rebounded to above 111.20 after matching Thursday’s 2017 low at 110.63 after House Republicans canceled vote on health care reform, lacking sufficient support. S&P 500 Recovers, Now Positive; VIX Falls Back Below 13

(WSJ 3/15/17)
U.S. government-bond prices posted their largest one-day gain since June on Wednesday after the Federal Reserve raised interest rates for the second time in three months.

Traders said investors bought stocks and bonds after the central bank released economic forecasts showing that Fed officials continue to expect two more rate increases this year. Some market participants had expected indications for a potential fourth rate increase this year, after the pace of economic gains picked up and some influential Fed speakers took a more hawkish tone in recent weeks.

The yield on the 10-year U.S. Treasury note tumbled to 2.50%, down from 2.595% on Tuesday. Yields fall when bond prices rise. Stocks surged, with the Dow Jones Industrial Average jumping 112.73 points, or 0.5%, to close at 20950.10.

(The Street, 3/9/17)
Speaking to reporters during his regular press conference in Frankfurt, Draghi told reporters that while the Bank's official forward guidance suggested rates could remain "at present or lower levels for an extended period of time", improving economic fundamentals would imply that the "or lower" clause is not likely to be applied, indicating a "lower sense of urgency" on further rate reductions.

The Bank also lifted inflation forecasts for this year and next and Draghi said that he and his Governing Council colleagues -- comprised of central bankers from around the Eurozone -- had agreed to remove a previous reference to the use of "all available instruments" in the Bank's policy toolbox.

The collective suggestions helped the euro gain sharply against the dollar, with the currency rising to as high as 1.0614 from 1.0555. Benchmark 10-year bund yields were also rising as Draghi spoke in Frankfurt, gaining 4 basis points to a two-week high of 0.41%

(Bloomberg, 4/25/17)
Bund, Bobl futures dip to session lows and Euribor strip edges steeper after Reuters reports that ECB officials see scope for sending small signal in June toward reducing monetary stimulus, citing three unidentified people familiar with the matter.

(Bloomberg 2/28/17)
The market odds of a March increase in US interest rates shot up to 80 per cent on Tuesday as Federal Reserve policymakers insisted they did not need to see Republican tax reforms and other policies before they act.

William Dudley, influential head of the New York Federal Reserve, said that the prospects for adding to the December 2016 rate increase had become “a lot more compelling”.

“It seems to me that most of the data we’ve seen over the last couple months is very much consistent with the economy continuing to grow at an above-trend pace, job gains remain pretty sturdy, inflation has actually drifted up a little bit as energy prices have increased,” he said in an interview with CNN.

(Bloomberg 2/14/17)
USTs Fall, Eurodollars Steepen, as Yellen Raises March Odds 10:12
Treasuries sharply lower in response to Yellen text which says “waiting too long to remove accommodation would be unwise,” and that further adjustment would likely be needed if economy is on track.
• 5s30s aggressively flattens in response, reaches 109.5bp, flattest since Jan. 20 and 1.7bp flatter on the day
• 10Y futures sell off around 12 ticks, reach 124-03, matching Feb. 3 lows
• Eurodollar strip bear steepens with whites lower by 1bp-3bp and greens, blues lower by 6bp
Fed fund futures based on April 2017 contract show about 34% chance of a rate hike at the March FOMC meeting vs 30% pre-testimony

(Bloomberg 2/9/17)
USTs Fall to Lows After Trump Promises Action on Taxes 10:16
Treasuries fall sharply to session lows led by 5Y after Trump says something will be announced on taxes in the next 2-3 weeks.
• 10Y futures contract moved 7 ticks to lows at 125-02; 65k traded over 5 minutes before 10am ET • Move coincides with advance for U.S. stocks and 50-pip surge in USD/JPY 50 to highest level since Jan. 3 Heavy Selling in Eurodollars as June Hike Odds Rise
Trading volume in Jun17 eurodollars jumped after Trump said something will be announced on taxes in the next 2-3 weeks; odds of Fed rate hike in June climbed to ~74% from 69% Wednesday.

(Bloomberg 2/14/17)
Italian bonds led gains in Europe after former Premier Matteo Renzi called a congress of his Democratic Party, reducing the chances of an early election in the nation.

Italy 10-year yields drop 3 basis points to 2.20 percent; analysts now look to early 2018 as most likely time for new elections; Italy-Germany 10y spread now tighter by around 10bps this week.