quote:
This morning looks UGLY, down 120 in the early futures.

The media is really pimping this concept of bernanke cutting off the QE, I personally don't see it happening

This morning's action probably has more to do with Dollar/yen. The yen short crowd probably had to sell something cover. We are already off the lows and could close flat to green by closing.

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Posted by BennyAndTheInkJets

Middle of a layover

Member since Nov 2010

5600 posts

Posted on 6/11/13 at 9:43 am to Blakely Bimbo

quote:
This morning's action probably has more to do with Dollar/yen. The yen short crowd probably had to sell something cover. We are already off the lows and could close flat to green by closing.

I would agree with you but most hedge funds that were in that carry trade had to sell out in May. A lot of the rate and market movements seen in May had a lot of endogenous market factors compared to exogenous. When so many players are short convexity your duration actually lengthens as rates rise, forcing you to de-risk.

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Posted by Coeur du Tigre

It was just outside of Barstow...

Member since Nov 2008

1488 posts

Posted on 6/11/13 at 10:26 am to BennyAndTheInkJets

quote:
A little color on dealer liquidity that I mentioned. This is more bearish than what I expect but still great color from somebody a lot smarter than me.

Thanks Benny.

Not in direct relation to market /dealer liquidity, but certainly something that tends to catch your eye:

"Consumer prices are being held down in part by the slowest velocity of money in March since at least 1959, according to data compiled by Bloomberg. The gauge measures the rate at which cash changes hands, dividing GDP by the Fed’s M2 measure of money supply."

Bloomberg: 'No Inflation as Yields Jump Belies Point of No Return View'

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