Subscribers, click here to download the report.
The Fed’s ~$50–55B/month in outright T-bill and T-bill buys to replace MBS prepayments has been sufficient to offset the withdrawal of the hedge fund Treasury basis trade. Hedge funds have cut short Treasury futures positions by 600,000 contracts since September in the 10 year Treasury futures alone. So far the Fed is winning the battle to hold the line.
But that is not the whole story going forward. Here’s what you need to know.
This report explains and illustrates the facts that inevitably led to this outlook, and suggests how to view this context in your trading strategy.
This report disdains Wall Street mythology, shows the real data and illustrative charts that clearly define the issues. It suggests your investment strategy for dealing with the facts, as opposed to the Fed or Street narrative.
Want the real-time data that drives Treasury supply and market direction?
Get the full Macro Liquidity series at LiquidityTrader.com — updated as the numbers come in.
Click here for today’s report, the complete archive and upcoming reports every week.