Bottom-line: 미국 국채 10년물 금리와 3개월물 금리 차이가 역전됨. 이 두 금리의 차이가 역전되는 것을 일반적으로 가장 강력한 경기침체의 징후로 보고 있음.
Treasury Curve’s Biggest Sign of Recession Yet. After flirting with inversion earlier in the week, the spread between 10-year and 3-month Treasuries has moved decisively into negative territory. In early trading, the spread has gone as low as -14 basis points. The 3mo/10yr spread is often seen as the clearest signal that recession in the US is coming.
Treasury Curve’s Biggest Sign of Recession Yet. After flirting with inversion earlier in the week, the spread between 10-year and 3-month Treasuries has moved decisively into negative territory. In early trading, the spread has gone as low as -14 basis points. The 3mo/10yr spread is often seen as the clearest signal that recession in the US is coming.
Bottom-line: 한국은 세계에서 가장 안전한 곳 중 하나에서 신용 위기로 위태로운 국가로 전락 중임. 현재 최고 등급의 회사채 스프레드까지 3개월 만에 157bp 확대됐고, 심지어 급여와 같은 단기성 자금조달을 위해 발행되는 채권의 금리까지 13년래 최고치까지 상승함. 이는 9월 강원도의 레고랜드 사태 이후 정부 지원의 차주조차 신용위기에 노출되어 취약할 수 있음이 드러나며 빠르게 악화됨. 특히 부동산 사업에 있어 주요한 자금조달원인 PF-ABCP 부실이 더욱 심각해질 수 있다는 공포가 확산되고 있음. 이와 관련해 증권사 및 건설사가 약 23조 6천억원의 자금이 노출되어 있는 것으로 파악됨.
Past financial crises are haunting South Korean policy makers as they rush to support a local credit market that’s quickly gone from one of the world’s safest to teetering on the brink. As Korea gets swept into a global debt market rout, corporate treasurers and market regulators in Seoul are staring down one of the most rapid deteriorations in the nation’s credit market ever. The rout is one of the worst in Asia’s local-currency markets amid a broader fixed-income slump this year. Yields on top-rated five-year Korean corporate debt have spiked 157 basis points in the three months through October, the worst such blowout on record. One particularly alarming development has been yields surging to a 13-year high on local commercial paper, which companies use to raise funds for short-term payments like payroll. The spike in the cost to borrow in that key money market intensified after a shock default in late September, when the developer of the Legoland Korea theme park in Gangwon Province to the northeast of Seoul missed payment on a kind of commercial paper repackaging loans. The builder’s largest shareholder is Gangwon, underscoring fears that in the new global era of rising interest rates, even borrowers with government backing are vulnerable. The type of financial engineering involved in that case is called project finance asset-backed commercial paper, or PF-ABCP as the Korean press shorthands it. It’s a key source of funds for the broader property sector. The real estate industry, as in many countries, is already straining under the impact of rising rates, amplifying fears that loans tied to construction projects underpinning the PF-ABCP could start souring more ahead. There’s a lot at stake, with at least 23.6 trillion won ($16.6 billion) of such instruments backed by brokerages or builders set to mature by the end of 2022, according to NICE Investors Service.
Past financial crises are haunting South Korean policy makers as they rush to support a local credit market that’s quickly gone from one of the world’s safest to teetering on the brink. As Korea gets swept into a global debt market rout, corporate treasurers and market regulators in Seoul are staring down one of the most rapid deteriorations in the nation’s credit market ever. The rout is one of the worst in Asia’s local-currency markets amid a broader fixed-income slump this year. Yields on top-rated five-year Korean corporate debt have spiked 157 basis points in the three months through October, the worst such blowout on record. One particularly alarming development has been yields surging to a 13-year high on local commercial paper, which companies use to raise funds for short-term payments like payroll. The spike in the cost to borrow in that key money market intensified after a shock default in late September, when the developer of the Legoland Korea theme park in Gangwon Province to the northeast of Seoul missed payment on a kind of commercial paper repackaging loans. The builder’s largest shareholder is Gangwon, underscoring fears that in the new global era of rising interest rates, even borrowers with government backing are vulnerable. The type of financial engineering involved in that case is called project finance asset-backed commercial paper, or PF-ABCP as the Korean press shorthands it. It’s a key source of funds for the broader property sector. The real estate industry, as in many countries, is already straining under the impact of rising rates, amplifying fears that loans tied to construction projects underpinning the PF-ABCP could start souring more ahead. There’s a lot at stake, with at least 23.6 trillion won ($16.6 billion) of such instruments backed by brokerages or builders set to mature by the end of 2022, according to NICE Investors Service.
아시는 분들은 아시겠지만, 저 또한 업계 종사자로써 우리 업계가 어떤지 월간으로 동향을 체크해봅니다.
한국형 헤지펀드 시장 (2022.10)
1. 설정액 1,000억원 이상 펀드는 총 59개며, 전략은 총 7개로 나눠짐. 흔히 생각하는 위험자산 형태의 헤지펀드 전략은 Multi Strategy(주식형이지만 메자닌과 비상장이 포함되는 형태), Equity Long Hedge, Equity Long/Short Hedge, Equity Global Hedge가 있음. 나머지는 대체투자(부동산) 혹은 수익형(채권) 펀드 전략임.
2. 최근 1개월 간 1,000억원 이상 설정액의 펀드에서 전략별 수익률 평균은 Multi Strategy +0.12%, Equity Long/Short Hedge +1.05%, Equity Long Hedge -6.31%, Equity Global Hedge -4.20%, Fixed Income -0.95%, Alternative -2.05%임. 흥미로운 점은 대체투자와 수익형 펀드가 위험자산에서 투자자들이 멀리 떠나면서 급격하게 설정액이 커졌는데, 이들의 'Safe haven' 성격이 최근 많이 왜곡되고 있음. 연 초 이후 수익률을 볼 때 Fixed Income에서 설정액이 가장 큰(8,260억원) 펀드의 수익률이 -10.50%, 두번째와 세번째로 큰 설정액(각각 4,888억원, 4,531억원)의 펀드 수익률이 각각 -7.87%, -9.55%임. 금리상승에 따른 영향을 받고 있음.
3. 위험자산을 다루는 헤지펀드 전략에서 Multi Strategy가 가장 큰 비중을 차지함. 독과점 구조라 할 수 있는데, 설정액 1,000억 이상을 기준으로 할 때, 4개 운용사가 15개의 펀드에서 3조 1,444억원의 설정액을 가지고 있음. 이들 펀드의 연 초 이후 수익률 평균은 -1.34%임. 이 전략에서 단일 펀드로 가장 큰 설정액은 6,672억원(NH Absolute Return Hedge Fund)임.
4. 설정액 500억원 이상 1,000억 미만 펀드는 총 77개며, 전략별로 볼 때 1개월 간 수익률 평균은 Multi Strategy +0.11%, Equity Long/Short Hedge -0.24%, Equity Long Hedge +2.60%, Equity Global Hedge -9.10%, Fixed Income -0.92%, Alternative +0.40%임.
5. 설정액 500억원 이상 1,000억 미만 펀드의 경우 53개 운용사가 분산되어 운용 중임. 이들이 운용 중인 펀드가 설정 된 해를 보면 2022년 21개, 2021년 24개, 2020년 7개, 2019년 8개로 총 60개의 펀드가 최근 4년간 설정되었음. 설정액 1,000억원 이상의 59개 펀드의 설정 된 해가 2022년 13개, 2021년 10개, 2020년 12개, 2019년 2개로 37개의 펀드인 점을 다소 차이를 보임. 1,000억 이상의 펀드 중 2013년에서 2017년 사이 설정 된 펀드가 18개며, 이 중 2016년이 11개 설정으로 가장 많았음.
6. 펀드 설정액 변동을 살펴보면, 1,000억원 이상 펀드에서 9월 말 대비로 Fixed Income에서 총 625억원 유출, Multi Strategy에서 총 526억원 유출, Equity Long/Short Hedge에서 총 -297억원이 유출됨. 반대로 Alternative에는 218억원이 유입되었음.
한국형 헤지펀드 시장 (2022.10)
1. 설정액 1,000억원 이상 펀드는 총 59개며, 전략은 총 7개로 나눠짐. 흔히 생각하는 위험자산 형태의 헤지펀드 전략은 Multi Strategy(주식형이지만 메자닌과 비상장이 포함되는 형태), Equity Long Hedge, Equity Long/Short Hedge, Equity Global Hedge가 있음. 나머지는 대체투자(부동산) 혹은 수익형(채권) 펀드 전략임.
2. 최근 1개월 간 1,000억원 이상 설정액의 펀드에서 전략별 수익률 평균은 Multi Strategy +0.12%, Equity Long/Short Hedge +1.05%, Equity Long Hedge -6.31%, Equity Global Hedge -4.20%, Fixed Income -0.95%, Alternative -2.05%임. 흥미로운 점은 대체투자와 수익형 펀드가 위험자산에서 투자자들이 멀리 떠나면서 급격하게 설정액이 커졌는데, 이들의 'Safe haven' 성격이 최근 많이 왜곡되고 있음. 연 초 이후 수익률을 볼 때 Fixed Income에서 설정액이 가장 큰(8,260억원) 펀드의 수익률이 -10.50%, 두번째와 세번째로 큰 설정액(각각 4,888억원, 4,531억원)의 펀드 수익률이 각각 -7.87%, -9.55%임. 금리상승에 따른 영향을 받고 있음.
3. 위험자산을 다루는 헤지펀드 전략에서 Multi Strategy가 가장 큰 비중을 차지함. 독과점 구조라 할 수 있는데, 설정액 1,000억 이상을 기준으로 할 때, 4개 운용사가 15개의 펀드에서 3조 1,444억원의 설정액을 가지고 있음. 이들 펀드의 연 초 이후 수익률 평균은 -1.34%임. 이 전략에서 단일 펀드로 가장 큰 설정액은 6,672억원(NH Absolute Return Hedge Fund)임.
4. 설정액 500억원 이상 1,000억 미만 펀드는 총 77개며, 전략별로 볼 때 1개월 간 수익률 평균은 Multi Strategy +0.11%, Equity Long/Short Hedge -0.24%, Equity Long Hedge +2.60%, Equity Global Hedge -9.10%, Fixed Income -0.92%, Alternative +0.40%임.
5. 설정액 500억원 이상 1,000억 미만 펀드의 경우 53개 운용사가 분산되어 운용 중임. 이들이 운용 중인 펀드가 설정 된 해를 보면 2022년 21개, 2021년 24개, 2020년 7개, 2019년 8개로 총 60개의 펀드가 최근 4년간 설정되었음. 설정액 1,000억원 이상의 59개 펀드의 설정 된 해가 2022년 13개, 2021년 10개, 2020년 12개, 2019년 2개로 37개의 펀드인 점을 다소 차이를 보임. 1,000억 이상의 펀드 중 2013년에서 2017년 사이 설정 된 펀드가 18개며, 이 중 2016년이 11개 설정으로 가장 많았음.
6. 펀드 설정액 변동을 살펴보면, 1,000억원 이상 펀드에서 9월 말 대비로 Fixed Income에서 총 625억원 유출, Multi Strategy에서 총 526억원 유출, Equity Long/Short Hedge에서 총 -297억원이 유출됨. 반대로 Alternative에는 218억원이 유입되었음.
Bottom-line: 견고한 노동시장은 인플레이션을 억제하려는 중앙은행의 노력, 그리고 경기침체가 임박했다는 경제학자들의 주장이 무시되고 있음. 물론 근로자에겐 이같은 노동시장의 활황이 좋은 일이지만, 조달비용이 높아지고 성장률이 둔화되는 중에 실업률만 낮은 상황이 임금의 상방압력과 가계소비의 탄력을 만들면서 인플레이션을 통제하려는 중앙은행에 어려움을 주고있음. OECD 38개 회원국 중 80%가 바이러스 대확산 이전 혹은 그 수준의 낮은 실업률에 머무르고 있음. 전반적인 노동시장의 강세가 소비를 강하게 지탱시켜주고 있음. 이처럼 고용시장이 지속 견조하다면 중앙은행은 완화적 태도로 돌아서기 어려울 것임.
Robust labor markets are defying central bankers’ efforts to tamp down inflation and economists’ predictions that recession is just around the corner. The strong job market is good for workers. But it’s bad for inflation, signalling to the world’s central banks, which are raising interest rates at the most aggressive pace in decades, that they can’t ease up. As borrowing costs surge and growth slows, unemployment rates are not rising. Instead, companies across developed economies are complaining of chronic worker shortages. A persistent mismatch between demand for new hires and the supply of workers is supporting wages and shielding consumers from slowdowns just when central banks need fading demand to cool inflation. As of September, employment across manufacturers and service providers globally had climbed each month for the last two years, according to a JPMorgan Chase & Co. gauge produced by S&P Global. And the OECD said unemployment in its 38 member nations reached 4.9% in August. The rate was below or equal to the pre-pandemic level in 80% of the countries. “You do see broad-based strength in labor markets,” said Joseph Lupton, global economist at JPMorgan. “Strong job growth is absolutely the central support for the consumer.”. When and if job growth starts to crack will help determine when central banks can slow or even stop raising rates. So long as hiring remains resilient, they may be reluctant to ease up.
Robust labor markets are defying central bankers’ efforts to tamp down inflation and economists’ predictions that recession is just around the corner. The strong job market is good for workers. But it’s bad for inflation, signalling to the world’s central banks, which are raising interest rates at the most aggressive pace in decades, that they can’t ease up. As borrowing costs surge and growth slows, unemployment rates are not rising. Instead, companies across developed economies are complaining of chronic worker shortages. A persistent mismatch between demand for new hires and the supply of workers is supporting wages and shielding consumers from slowdowns just when central banks need fading demand to cool inflation. As of September, employment across manufacturers and service providers globally had climbed each month for the last two years, according to a JPMorgan Chase & Co. gauge produced by S&P Global. And the OECD said unemployment in its 38 member nations reached 4.9% in August. The rate was below or equal to the pre-pandemic level in 80% of the countries. “You do see broad-based strength in labor markets,” said Joseph Lupton, global economist at JPMorgan. “Strong job growth is absolutely the central support for the consumer.”. When and if job growth starts to crack will help determine when central banks can slow or even stop raising rates. So long as hiring remains resilient, they may be reluctant to ease up.
Docent: 상장 이후 유통시장에서 거래를 한다면, 이전 시장에서도 투자를 주도하는 사모펀드의 움직임을 주시할 필요가 있기에 도슨트 함. 드라이 파우더는 투자를 위탁받은 자금이 투자처를 찾지 못하고 펀드에 현금으로 남아있는 것을 말함. 사모펀드의 드라이 파우더가 증가하고 있음. 낮은 조달금리 하에서 현금 뿐만 아니라 레버리지까지 사용해 투자를 하고, 넘치는 유동성으로 인해 더 높은 가치평가를 받고 투자금을 회수하는 순환이 반복됐으며, 이런 투자형태는 대확산 시기 때 조차도 흔들리지 않았음. 그러나 올해 초 러시아의 우크라이나 침공 이후 치솟은 인플레이션과 이를 통제하기 위한 정책금리 인상에 따라 사모펀드들은 더 높은 조달비용, 더 낮은 기대 수익률, 불확실한 투자환경에 놓이게 됨. 이에 따라 현금을 집행하지 말고 상황이 나아질 때까지 보류하란 요청도 있으며, 운용역 입장에서도 마땅한 투자처를 찾지 못해 시한을 두고 집행해야 하는 현금은 쌓여만 가니 압박에 시달린단 것임. 시장에서는 유동성 부족이라 하지만 이쪽 업계에서는 투자금이 유휴현금 상태로 머물러 있음. 통계를 보면 10월 사모펀드 집행자금은 약 300억 달러로 대확산 이후 가장 낮은 수준임.
Time is ticking away for private equity firms to get ready for their next wave of deals. Rising interest rates, inflation and recession risks have eroded consumer confidence and left buyout firms facing a new reality of higher financing costs and potentially lower returns. None of which changes the fact there’s more than $1 trillion sitting in their funds that needs to be spent. “People say there’s no financing available but then our clients are telling us ‘we have a big fund that we have to deploy,” said Umberto Giacometti, co-head of financial sponsors in Europe, the Middle East and Africa at Nomura Holdings Inc. “If you need to deploy, say, $10 billion in four years, and don’t do anything for sixth months, you are under pressure.”. The shift is profound for an asset class that for more than a decade was flooded with cash from investors hunting yield in a low-interest rate environment. Those same rates allowed firms to pile debt onto deals to amplify returns, while rising valuations offered exit routes at healthy premiums. So it went, even through the depths of the Covid-19 crisis. Things began to slow in early 2022 on creeping fears about inflation and rising rates -- trends that accelerated after Russia invaded Ukraine. Private equity spending stands at roughly $30 billion in October, according to data compiled by Bloomberg -- the lowest monthly outlay since early in the pandemic. Some investors have even asked firms to stop deploying capital while they seek to build cash buffers. “It’s really not that we’ve got nothing to do, on the contrary,” said Burc Hesse, a corporate private equity partner at law firm Latham & Watkins LLP in Germany. “There’s still lots of dry powder and many buyout firms have closed funds last year, so they will deploy.”
Time is ticking away for private equity firms to get ready for their next wave of deals. Rising interest rates, inflation and recession risks have eroded consumer confidence and left buyout firms facing a new reality of higher financing costs and potentially lower returns. None of which changes the fact there’s more than $1 trillion sitting in their funds that needs to be spent. “People say there’s no financing available but then our clients are telling us ‘we have a big fund that we have to deploy,” said Umberto Giacometti, co-head of financial sponsors in Europe, the Middle East and Africa at Nomura Holdings Inc. “If you need to deploy, say, $10 billion in four years, and don’t do anything for sixth months, you are under pressure.”. The shift is profound for an asset class that for more than a decade was flooded with cash from investors hunting yield in a low-interest rate environment. Those same rates allowed firms to pile debt onto deals to amplify returns, while rising valuations offered exit routes at healthy premiums. So it went, even through the depths of the Covid-19 crisis. Things began to slow in early 2022 on creeping fears about inflation and rising rates -- trends that accelerated after Russia invaded Ukraine. Private equity spending stands at roughly $30 billion in October, according to data compiled by Bloomberg -- the lowest monthly outlay since early in the pandemic. Some investors have even asked firms to stop deploying capital while they seek to build cash buffers. “It’s really not that we’ve got nothing to do, on the contrary,” said Burc Hesse, a corporate private equity partner at law firm Latham & Watkins LLP in Germany. “There’s still lots of dry powder and many buyout firms have closed funds last year, so they will deploy.”
Euro-area inflation surged to a fresh all-time high, while the bloc’s economy lost momentum -- reinforcing fears that a recession is now all-but unavoidable.
Bottom-line: 1929년, 1987년, 2008년 때문에 10월은 공포의 달로 생각될 수 있지만, 두 가지 측면에서 긍정적의 시작일 수도 있음. 과거 17번의 약세 시장국면을 끝낸 '곰 사냥꾼'으로써 10월은 6번의 역할을 했음. 또한 중간선거와 관련해 계절성이 있는데, 대통령 임기의 16개 분기 중 중간선거가 있는 4분기와 다음 해 1분기가 가장 강한 수익률을 보였다는 것임. 이런 일이 다시 반복될 수 있을까?
Although October can evoke fear on Wall Street following stock market crashes in 1929, 1987 and 2008, it’s living up to its reputation as the best month in US midterm election years. Now traders are holding out hope that this October will follow a historical pattern of being a “bear-market killer” following a turbulent year for US equities. The S&P 500 Index has surged nearly 9% this month, putting it on track for its biggest monthly gain since July and its second-best month in nearly two years. When stocks do poorly in September, a rebound tends to be common. In fact, midterm years have typically been quite strong in October, with the index rising 2.7% on average during the month since 1950, according to The Stock Trader’s Almanac. October earned its reputation as “bear killer” after turning the tide in six of the past 17 bear or near-bear markets since World War II, according to Ryan Detrick, chief market strategist at Carson Group. And when it comes to elections, the fourth quarter of midterm years and the following first quarter historically have been the two strongest of the 16-quarter presidential cycle, delivering average gains of 6.4% and 6.9% respectively for the S&P 500, according to investment research firm CFRA. “While October has a reputation for crashes, it is really a bear market killer,” Detrick wrote in a note. “Could it happen again? With sentiment this pessimistic and extremely positive seasonals right around the corner, we’d be open to it.”.
Although October can evoke fear on Wall Street following stock market crashes in 1929, 1987 and 2008, it’s living up to its reputation as the best month in US midterm election years. Now traders are holding out hope that this October will follow a historical pattern of being a “bear-market killer” following a turbulent year for US equities. The S&P 500 Index has surged nearly 9% this month, putting it on track for its biggest monthly gain since July and its second-best month in nearly two years. When stocks do poorly in September, a rebound tends to be common. In fact, midterm years have typically been quite strong in October, with the index rising 2.7% on average during the month since 1950, according to The Stock Trader’s Almanac. October earned its reputation as “bear killer” after turning the tide in six of the past 17 bear or near-bear markets since World War II, according to Ryan Detrick, chief market strategist at Carson Group. And when it comes to elections, the fourth quarter of midterm years and the following first quarter historically have been the two strongest of the 16-quarter presidential cycle, delivering average gains of 6.4% and 6.9% respectively for the S&P 500, according to investment research firm CFRA. “While October has a reputation for crashes, it is really a bear market killer,” Detrick wrote in a note. “Could it happen again? With sentiment this pessimistic and extremely positive seasonals right around the corner, we’d be open to it.”.
In Case You Missed It
• 정책금리 인상에 따른 채권 회피 현상
• 물가지표 쇼크에도 반등한 이유는?
• 주가 반등을 크게 만든 알고리즘 매매
• 정책금리 6%가 될 수 있는 경우는?
• 옵션에 대한 개인적 생각
• 변동성은 왜 낮을까에 대한 사담
• R*와 R**에 대한 사담
• R**는 출구를 위한 변명일까?
• 파월은 어떤 사람으로 기억되고 싶을까?
• 정책금리 인상에 따른 채권 회피 현상
• 물가지표 쇼크에도 반등한 이유는?
• 주가 반등을 크게 만든 알고리즘 매매
• 정책금리 6%가 될 수 있는 경우는?
• 옵션에 대한 개인적 생각
• 변동성은 왜 낮을까에 대한 사담
• R*와 R**에 대한 사담
• R**는 출구를 위한 변명일까?
• 파월은 어떤 사람으로 기억되고 싶을까?
Bottom-line: 바이러스 억제 정책을 완화하는데 대한 움직임 없다고 답변함.
Chinese Foreign Ministry spokesman Zhao Lijian said he’s “not aware of what you mentioned,” when asked whether the government formed a committee to assess ways to exit Covid Zero.
'unconfirmed social media posts speculating that a committee was being formed to assess scenarios on how to exit Covid Zero.'
Chinese Foreign Ministry spokesman Zhao Lijian said he’s “not aware of what you mentioned,” when asked whether the government formed a committee to assess ways to exit Covid Zero.
'unconfirmed social media posts speculating that a committee was being formed to assess scenarios on how to exit Covid Zero.'
Bottom-line: 이미 많은 국채 수익률 차이를 계산하는 방식이 0 이하로 떨어진 상태에서 중앙은행이 가장 주시한다는 3개월-18개월 차이가 0에 근접하고 있음. 이에 따라 4.34%로 2007년 이후 최고치를 기록했던 미국 국채 10년물 금리가 3.94%까지 하락하며 채권 랠리를 이어가고 있음. 지난 3월 많은 채권 거래자들이 국채 2년물 금리가 국채 10년물 금리를 상회할 때 경고했던 경기침체의 위험을 파월은 잘못됐다 말하면서 3개월-18개월 수익률 차이를 보자고 했었음. 만일 이 수익률이 역전되면 경기가 약해졌다는 이야기고, 금리를 인하할 수 있다고 했기 때문임.
Bonds rallied ahead of what promises to be the Federal Reserve’s fifth-straight outsized rate hike later this week amid fresh warnings that a recession is inevitable as the central bank continues to tighten policy. The yield on 10-year Treasuries fell as much as 11 basis points to 3.94%, compared to a peak of 4.34% last month, the highest since 2007. Traders are looking ahead to ISM manufacturing data for further clues on the state of the US economy before the Fed sets policy on Wednesday, where another three-quarter point hike looks like a near certainty. Bund yields fell 10 basis points to 2.05%. The rush for bonds comes as Chair Jerome Powell’s favored portion of the yield curve -- the difference between where three-month rates are now versus where they are expected to be in 18 months’ time -- is on the cusp of inverting, with the spread between the two tumbling to a mere 0.2 percentage points Tuesday from 2.7 percentage points in April. An inverted yield curve is a key warning sign for many investors that a recession is coming as the market begins to price in an end to tighter policy and braces for lower rates in the future to soften the blow of a looming slowdown. Many closely-watched spreads in the Treasury market have already flipped below zero. In March, Powell downplayed the significance of two-year yields rising above 10-year rates -- an often-cited harbinger of recession. He argued traders were looking at the wrong metric and that the shorter-end measure gives a clearer read because “if it’s inverted, that means the Fed’s going to cut, which means the economy is weak.”.
Bonds rallied ahead of what promises to be the Federal Reserve’s fifth-straight outsized rate hike later this week amid fresh warnings that a recession is inevitable as the central bank continues to tighten policy. The yield on 10-year Treasuries fell as much as 11 basis points to 3.94%, compared to a peak of 4.34% last month, the highest since 2007. Traders are looking ahead to ISM manufacturing data for further clues on the state of the US economy before the Fed sets policy on Wednesday, where another three-quarter point hike looks like a near certainty. Bund yields fell 10 basis points to 2.05%. The rush for bonds comes as Chair Jerome Powell’s favored portion of the yield curve -- the difference between where three-month rates are now versus where they are expected to be in 18 months’ time -- is on the cusp of inverting, with the spread between the two tumbling to a mere 0.2 percentage points Tuesday from 2.7 percentage points in April. An inverted yield curve is a key warning sign for many investors that a recession is coming as the market begins to price in an end to tighter policy and braces for lower rates in the future to soften the blow of a looming slowdown. Many closely-watched spreads in the Treasury market have already flipped below zero. In March, Powell downplayed the significance of two-year yields rising above 10-year rates -- an often-cited harbinger of recession. He argued traders were looking at the wrong metric and that the shorter-end measure gives a clearer read because “if it’s inverted, that means the Fed’s going to cut, which means the economy is weak.”.
Bottom-line: 이렇게 좋을지 몰랐고, 중앙은행을 압박할 것임.
Job Openings in US Unexpectedly Rise, Keeping Pressure on Fed.
Job Openings in US Unexpectedly Rise, Keeping Pressure on Fed.
The Treasury curve flattened after the US October manufacturing report beat estimates, even as prices eased. Components of new orders, production and employment rose. At the same time, prices paid fell into contraction and to the lowest since the start of the pandemic. Backlogs and supplier deliveries also slipped into contraction -- meaning product snarls are easing. The net of the report is that demand remains strong and prices are declining. While the latter is good news for the Fed, demand remains firm, and the central bank has said it cannot take the foot off tightening for fear of inflation resurging again.