McElligott Explains How ICBC Hack Might’ve Impacted Long Bond Sale
As the keen among you have surely surmised by now, the optically awful 30-year sale which undercut market sentiment ahead of Jerome Powell's IMF address this week was amenable to a "more than meets the eye" interpretation.
The 5bps tail and huge dealer award ostensibly pointed to lingering sponsorship concerns. As I put in the minutes following the sale, the poor result was a testament to the notion that it’s going to take more than a polite nod from Treasury to the term premium repricing and
All the young homing pigeons at the Chinese bank were “lying flat”. 🙂
It is always important to try to understand how the machine works. Equally important is the ability to recognize that we are blindfolded and walking around trtying to feel the elephant. In equities it is a common opinion that a less than a 3 standard deviation move is noise. Why can’t this happen in bonds? Because bond guys and equity guys have diffenet culture and don’t talk to one another? When one asset class bangs into another there is the opportunity to make a lot of money….