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.
Two issuers account for more than four-fifths of the stablecoin float. Their reserves are both extremely short and not remotely alike, and only one of the two could legally hold what it holds under American law.
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.
Money market funds hold record balances. For fifteen years cash was what you held between decisions; it is now a decision.
The instant rails work, clear large sums, and run continuously. Corporate finance departments were designed around the delay they remove.
A small but growing group of companies is holding working balances in tokenized cash equivalents, trading yield and settlement speed against new operational risk.