YouSaid · the spoken record

Althea Spinozzi

lines on the record
58
first
2023-11-03
most recent
2023-11-03
sittings or episodes
1
sources
podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

  1. “We can find U.S. treasuries with a maturity to 2050 paying slightly over 1% coupon. These issuances have been falling to 40 cents on the dollars. And a lot of people have been buying them because they say in like this it's cheap buying US treasuries at 40 cents on the dollars is almost a distressed case, right? But the problem with that kind of trade is that if you buy now and this trade gets against you, right? Because the duration is massive on these kind of bonds, you are not going to be able to do anything with this kind of issuance. You just have to pray that at a certain point the Federal Reserve is going to cut. Rates fast enough and revert to what we have, to the kind of levels that we have seen more or less during the COVID pandemic or just before the COVID pandemic. And right now, with inflation running”

    2023-11-03 · Forward Guidance · Althea Spinozzi on Stagflation, Term Premia, and Ultra Long-Duration Bonds · IDENTIFIED FROM THE TRANSCRIPT

  2. “Done and that maybe we are seeing a rally this week on the back of better expectations in terms of supply, but still it's very important to say that the US Treasury has announced that also next quarter they're going to increase coupon supply because they have a bigger fiscal spending that they have to finance. And so at this point in time, it's very hard to see that trade performing. And Jack, I want to make a practical example, right? There is obviously we have a lot of US Treasury issuance, but if we take the ones that they bear a very low coupon, for example, the ones that they have been issued during the 2020 COVID pandemic.”

    2023-11-03 · Forward Guidance · Althea Spinozzi on Stagflation, Term Premia, and Ultra Long-Duration Bonds · IDENTIFIED FROM THE TRANSCRIPT

  3. “Are not there either to buy these kind of insurances because they bought US Treasuries at 4.2% and now they don't have any more that buffer to add on to their duration. And foreigner buyers, and I'm talking especially about Japanese investors which hold around 15% of the US treasuries outstanding, they are repatriating home. Why? Because right now Japanese investors are buying US treasuries at 4.6% will need to lock in minus 1% yield once they hedge currency risk. Everything is telling me that the bond bear market is not”

    2023-11-03 · Forward Guidance · Althea Spinozzi on Stagflation, Term Premia, and Ultra Long-Duration Bonds · IDENTIFIED FROM THE TRANSCRIPT

  4. “If we look at pre-COVID, so let's say the 10 years between 2010 and 2020, the average size, auction size of 10 years notes was 22 billion, so almost half what the US Treasury is selling next week and roughly around 14 billion dollars in 30-year US treasuries. We have seen a pickup of almost 60-70% in thermal sizes, but the main difference is that before COVID and also during COVID, we had quantitative easing. Now we don't have quantitative easing. We have quantitative tightening. The Federal Reserve is a net seller of these issuances. U.S. banks”

    2023-11-03 · Forward Guidance · Althea Spinozzi on Stagflation, Term Premia, and Ultra Long-Duration Bonds · IDENTIFIED FROM THE TRANSCRIPT

  5. “The US Treasury is next week is going to sell $112 billion worth in T-bills and coupon notes against the 114 that the market was expecting. So that has lowered the term premium because less issuance means somewhat tighter demand and supply and that should be constructive for risk and that's why we have seen yields dropping before the FOMC meeting. But the big problem with that is that next week the kind of sizes that the US treasurer is going to sell on 10 years and 30 year notes are massive and they are similar to what we have seen during the COVID pandemic. pandemic. The U.S. Treasury selling 40 billion notes, 10 years notes. And I believe it was around 24 billion 30 years bonds.”

    2023-11-03 · Forward Guidance · Althea Spinozzi on Stagflation, Term Premia, and Ultra Long-Duration Bonds · IDENTIFIED FROM THE TRANSCRIPT

  6. “To now 4.65% around 30 basis points lower. And today, people really think that the duration trade is a good trade. But I still think that it's not the time yet to pick up that bet. The reason it's very simple, there is a lot of selling pressure. You see, let's start from yesterday, the quarterly refunding announcement. Yesterday, 10-year US Treasury yields dropped by 20 basis points in one day, 15 basis points of those 20 came before the FOMC meeting. And it was due to weaker ISM readings, of course, but also in the spatially because the quarterly refunding announcement showed that”

    2023-11-03 · Forward Guidance · Althea Spinozzi on Stagflation, Term Premia, and Ultra Long-Duration Bonds · IDENTIFIED FROM THE TRANSCRIPT

  7. “Well, Jack, I've been a bond bear for a couple of years now, and I'm still struggling in taking duration risk. And with duration risk, I'm talking more about the ultra-long maturities in the incurve, so 20 year plus, the famous, for example, TLT that I'm sure that you have discussed a lot about. And the reason behind that is that we might not have seen the end of the bear market in the long part of the year curve. Yesterday, two crucial things happened in the United States. We had our quarterly refunding announcement, and we had the FOMC meeting. Following this announcement, we had the IL curve bull steepening. So we have seen 10-year ills going from 4.95%.”

    2023-11-03 · Forward Guidance · Althea Spinozzi on Stagflation, Term Premia, and Ultra Long-Duration Bonds · IDENTIFIED FROM THE TRANSCRIPT

  8. “Thank you for joining us. So let's stick in my neck of the woods U.S. rates, the long duration treasuries have been in a brutal bear market that many thought was over after the brutal banker market in 2022. summer and late fall the pain has continued however over the past 48 hours there's been a renewed rally in the long end based on the u.s treasury making a certain announcement so overall let's start what is your view on on duration now are bonds you know attractive”

    2023-11-03 · Forward Guidance · Althea Spinozzi on Stagflation, Term Premia, and Ultra Long-Duration Bonds · IDENTIFIED FROM THE TRANSCRIPT