Ed Bradford

Always good to remember that markets is people.... and their positions

@BlacklionCTA Before QT started, KC Fed estimates were 160 bps so a residual of 60 bps seems like a reasonable estimate

@Fullcarry Do you agree with Barclays Ed?

This is emerging as sell-side consensus. FWIW Barclays estimates Fed duration heavy portfolio is suppressing term premium by 60 bps.

Not "mission accomplished" comment pressuring USTs

@MKTWgoldstein Legacy hedging trades need to get unwound.

In what world would Fed hike now? Even if PPI comes in hot.

July Fed rate hike probability still 12%? Cmon it's zero.

Most negative headline print since April 2020

A negative core MoM

To hike or not to hike in July. We'll know soon

Pre-CPI rate path update. 4.13 funds rate expected for hike cycle terminal rate next May so 2s with a 4.24 yield sporting nice carry profile

@Fedwatchenjoyer Take advantage of the odds then and buy Q6 FF futures

@Fullcarry Is bar for hike not high given Williams has on two occasions said rates are “well positioned” and expects prices to come down in the coming months?

Whether the Fed hikes rates in July will resolve next week after June CPI prints. Hike odds pulled back after tepid job gains and inline FOMC minutes and are now hovering around 20%

@BlacklionCTA They won't hike if CPI prints as expected

@Fullcarry 3.75% here. High, but cooling from the previous month.

@VKMacro My guess it's US rates. USD back bid with yields firming up

I think many of the narratives re: JPY don’t make sense. Agree BoJ monpol is likely lose but then despite recent hikes it’s had 0 effect Intervention saw no bid for jpy at all. No sticking power, unlike 2022/ 24. Nikkei rally forcing jpy selling -maybe but not sure

Interesting long bond auction today with yields back above 5% which has always generated solid buying. This will be the fourth foray to these levels though. We'll see if buying shows up again. Post auction price action will be telling

@aRishisays Also notable that unlike price-insensitive buyers like foreign countries and their central banks, price-sensitive buyers have to pay taxes on their UST income

“The manager commented that the ownership composition of Treasury securities has shifted somewhat over the past several years from relatively price-insensitive official-sector holders to more price-sensitive private investors, which could have implications for the term premium component of yields.” TL:DR - who’s gonna buy the bonds? cc @acllc2

Also, looks like nominal 30s are growing increasingly more comfortable with the 5 handle which is a good thing if you like a more normalized UST curve.

30y reals eyeballing 18 year highs at 2.87%. QE era negative real long-end rates now a slowly fading memory

Worth watching: The prime-age labor force participation rate fell sharply in June. Prime-age labor force participation rate June: 83.3% Primage-age labor force participation rate May: 83.9% As @fcastofthemonth points out, this one-month decline of -0.6pp is the biggest one-month drop since the series began in 1948 (excluding April 2020) Normally when you see something this *weird* it turns out to be a statistical quirk that gets reversed the next month. But we'll see...

@AsiehMansourCRE Yeah. This was a surprising print. The revisions were severe too

@Fullcarry I thought with the World Cup hiring we would get a bounce.

Fed friendly print. Odds of July hike tumbling