Treasury Auction Days Increasingly Impact Equities Despite Soft-Landing Economic Indicators☕
As our astute readers have probably noticed, treasury auction days have become increasingly large event days for equities, even as we hit the end of the current hiking cycle and with econ data pointing to a goldilocks soft-landing scenario. With long-end bond volatility realizing substantially above implied, the bond market is sending signals that it's still struggling to cope with the increased auction sizes, even after Yellen's heroic attempt to buffer concerns in the November QRA. For the traders amongst us, at least's there's new data points to trade upon in the foreseeable future. After all, everything has always been about rates, isn't it?
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