The SEC has proposed rewriting Rule 17a-7 so registered funds can again trade most fixed-income securities with affiliated funds. A 2020 valuation rule had shut that door for most bonds. The proposal moves oversight from fund boards to compliance officers.
Oil came off its highs and the bond market is being written up as having found its footing. On Friday's closes the two-year fell six basis points and the thirty-year rose two, to the highest level of the reintroduced series. A curve that was the flattest of the year on Monday ended the week fifteen basis points steeper. Wednesday brings the August PCE print and Micron's fourth quarter in the same session.
Bitcoin traded below $83,000 on Thursday as the ten-year Treasury settled at 5.18 per cent, its highest since 2007. The fund flows that had just erased the year's outflows arrived at $28m, down from $999m on Monday. Gold fell as well, and that is the part which explains the rest.
This desk argued yesterday morning that September's Treasury sell-off was entirely a front-end event. Wednesday's close ended that: the thirty-year added eleven basis points, its equal-largest move of the year. The reported comparison with 2004 is still wrong, for an instructive reason.
The long end is at levels last seen in 2007 and has barely moved this month. The entire September repricing has happened at the front, and the curve is the flattest it has been all year.
The long bond cleared at its highest auction yield since 2001 — and the sale itself went well, which is the part the headline misses.
A unanimous quarter-point increase was the expected part. The projections were not: no cuts in 2027, and a higher resting place for rates after that.
The benchmark closed above the line for the first time since 2007, a day before a Fed decision the futures market now treats as all but settled.
The ten-year sits at 4.975% with a Federal Reserve decision this week. The thirty-year has already crossed five and nobody is discussing it.
Yields at a level that would normally end a rally have not ended this one. The explanation on offer is that the buying is coming from inside the technology sector.
Brent at a four-month high pushed global yields to multi-year peaks and sent equities down, with the supply disruption running through two chokepoints at once.
The Treasury tripled the size of its long-bond repurchase and the market still wanted more. Ten-year yields closed at their highest since October 2023.
An amended clearing requirement follows Canadian and Mexican interest rate benchmarks to their replacements, closing a chapter of the reform that began with LIBOR.
Official purchases have run at record levels through falling prices, which is what distinguishes a reserve decision from a trade.
Companies are issuing more debt than at any point on record and paying historically little for it. Both facts are true at once, which is the puzzle.
A strategy that earns pennies on enormous size only works while the financing is nearly free. Regulators are considering making it cost something.
Central clearing mandates are reshaping the world's most important market, and dealers, funds, and platforms are repositioning around the new pipes.
Portfolio trading and all-to-all networks have done for credit what a decade of predictions kept promising.