Payroll Reports Sink ‘Dollar’ Further

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

The doubts about the payroll report were taken as no doubts at all in “dollar” trading. The three indications I gave yesterday in terms of representing liquidity were all pushed farther after the jobs data essentially confirmed the direction where this is all likely heading. While the yen may have been more muted, and the “shock” wearing off in later morning trading, treasuries were heavily bid higher (price) bringing intraday yields back to the lows of August 24.

ABOOK Oct 2015 Dollar YenABOOK Oct 2015 Dollar 10s

Meanwhile, eurodollars just exploded, the entire curve withering significantly yet again.

ABOOK Oct 2015 Dollar Eurodollar June 2018bABOOK Oct 2015 Dollar Eurodollar Curve2ABOOK Oct 2015 Dollar Eurodollar Curve

With corporate bubble prices further teetering yesterday, any updates for trading today are at high risk especially heading into what is shaping up as a dour weekend. The downside to the corporate bubble is acceleration (and these prices/yields only upated through yesterday). Even investment grade and AAA spreads are creeping up again.

ABOOK Oct 2015 Dollar LSTAABOOK Oct 2015 Dollar BofAML CCCABOOK Oct 2015 Dollar BofAML Master IIABOOK Oct 2015 Dollar BofAML AAA Spread