Macro & USD IG Overview

Macro & USD IG Overview

potential for a double bottom pattern remains to be seen today.

Macro & USD IG Overview

Macro & USD IG Overview

Macro & USD IG Overview

Today, I executed a strategic decision to trim 70% of my bull steepener position. The rationale for this move is underpinned by several key factors:

1. A rate cut exceeding 125bps this year appears too much without further shocks from PMI and NFP data in…

Macro & USD IG Overview

Macro & USD IG Overview

something’s about to happen…

the odds favor lower yields and wider credit spreads

Blue line = Total NFP

Red line = Goods-Producing NFP

Historically, manufacturing and construction payrolls tend to peak ahead of total payrolls, or services employment. Right now, goods-producing NFP has already peaked and is entering a slowdown phase.…

US 2s5s10s fly tracks the Fed cycle — 5yr usually outperforms until real cuts hit.

Friday’s ±8bp flip says it all. With Sep cut a done deal, 5yr edge is gone.

The fly is about to turn.

And 2s & 5s held April lows — classic double bottom setup.

Buy fade / sell Apr retest

expect Hard to see April lows breaking this week, for now

https://substack.com/@traderinkorea/note/c-153537399

One thing to note: this is just a tactical view.

Last week's NFP release confirms that employment is currently on an obvious downward trend. NFP is not easily recovered by just a few cuts, so I expect…

IG Credit view

Overall hit ratio on new issues is looking much weaker vs a few weeks ago. RMs are offloading credit as yields approach April lows — even with equities firmer & vols cheapening. 3yr FRN demand is also fading, All point to limited room for…

On FOMC day, I expect the Fed to lean more dovish than what markets are currently pricing. I place little weight on the dots or the SEP—this may move FFZ5, but should have only limited impact on the 5-10y yield. I believe the Fed stands on the dovish side…

The new CBBAU deal looks like a no-brainer. IPT is 40+bp wide vs outstanding bonds, and I expect solid demand given last week’s yield move higher and the WSTP FRN 07/30 trading in the 60s. My FV levels are ~43bp for the fixed and ~63bp for the FRN

All in yield accounts showing up on the bid today, suggesting they see this level as cheap. 5yr has given back the entire month’s rally, now roughly flat mtd. I added longs in 5s & 10s treasuries.

Prefer A- credits in the 6–7yr bucket, looking to roll both the Treasury and credit curves. Those maturities stand out on the credit curve. I bought NTT 32s when they traded at the 35 level; as they have since realigned with the curve and other maturities…

This shows how far the SOFR rate is trading from the midpoint of the Fed’s target range (currently 4.00%–4.25%).

A negative reading means SOFR is rising above the mid level, suggesting stress in the funding market.

If this continues deeper into negative…

mkt stayed resilient yday — credit tightened ~1bp even with SPX -1.2%, NDX -2%, USTs rallying. what’s more interesting was strong TMT credits : new GOOGL/META/ORCL -5~-8bp. Asia panic selloff usually reversed in LDN/NY; today’s -6% KOSPI adds to that reversal…