Is Japan about to loosen its grip on bonds?
The Bank of Japan remains the world’s last monetary outlier, but its grip on the domestic government bond market is becoming increasingly untenable.
Markets & Finance
Banks passed the stress test. Now comes the real test
The Federal Reserve’s annual stress tests have evolved into an elaborate regulatory set-piece.
Why British homeowners feel rate rises faster than anyone
The transmission mechanism of monetary policy is rarely uniform across advanced economies, but the United Kingdom offers a case study in acute structural sensitivity.
Britain's mortgage crunch returns
For British mortgage holders, the benign era of negligible debt service has ended with terrifying velocity.
A bull market built on seven stocks
The bull market has officially arrived, at least according to the arbitrary twenty per cent benchmark that equity commentators revere.
The Treasury refills its account, and markets pay
The plumbing of the global financial system is about to experience a high-pressure stress test.
Special Report
Memorial Day: The debt deal is done. Now comes the bill
Political theatre in Washington has concluded with its customary anticlimax, but the financial reckoning is only just entering the order books.
Get ready for a flood of Treasury bills
As Washington negotiators inch toward an inevitable eleventh-hour compromise to suspend the statutory debt ceiling until 2025, wholesale money markets are bracing for the liquidity hangover.
Why regional banks lost a third of their value
The KBW Regional Banking Index (KRE) has suffered an unmitigated structural collapse, plunging by more than 35 per cent since the initial failure of Silicon Valley Bank on 8 March.
Markets start pricing an American default
The United States sovereign credit default swap (CDS) market was long regarded as an academic backwater, an illiquid instrument traded by a handful of quantitative desks to hedge bizarre structural edge cases.
The Treasury bills nobody wants to hold
The statutory debt ceiling is approaching its summer resolution, and the front end of the US Treasury curve has developed an unprecedented, pathological distortion.
Watching deposits leave in real time
In normal economic cycles, the Federal Reserve’s weekly H.8 release on commercial bank assets and liabilities is an arcane statistical publication read only by bank equity analysts and money market economists.
First Republic has been rescued. It hasn't been saved
On 16 March, a consortium of eleven of America’s largest commercial banks, orchestrated by JPMorgan Chase and Treasury Secretary Janet Yellen, deposited $30 billion of uninsured cash into First Republic Bank.
Savers flee banks for money funds
The banking turmoil of March 2023 unleashed the fastest migration of retail and corporate capital in modern financial history.
Why Credit Suisse bondholders lost everything before shareholders
On Sunday, 19 March, the Swiss authorities detonated a legal and financial shockwave that shattered one of the most sacred doctrines of corporate finance.
Are bank failures doing the Fed's job for it?
As the dust settled on the frantic weekend that dismantled Silicon Valley Bank and Signature Bank, Federal Reserve policymakers confronted a radically altered macroeconomic calculus ahead of their March FOMC meeting.
The Fed's quiet bailout of banks' bad bond bets
When the Federal Reserve published its weekly H.4.1 balance-sheet release on Thursday, 16 March, the numbers confirmed the staggering scale of the banking system’s emergency triage.
After SVB, the biggest bond rally since 1987
The collapse of Silicon Valley Bank detonated an institutional panic across global capital markets, triggering the most violent flight-to-safety rally in sovereign debt since the Black Monday crash of October 1987.
Explainer
How a bank run happens at the speed of an app
The sudden, cinematic demise of Silicon Valley Bank (SVB) will be remembered as the first true bank run of the smartphone era.
Could rates really hit 6%?
Only a few short weeks ago, anyone suggesting that the Federal Reserve might push the federal funds rate toward 6.0 per cent would have been dismissed as an alarmist trading outside institutional reality.
Private credit's borrowers are feeling the squeeze
The private debt market spent the past decade marketing itself to institutional allocators as an all-weather paradise of floating-rate yield and superior structural protections.
Special Report
Valentine's Day: Markets still love rate cuts. The Fed doesn't love them back
Financial markets have spent the past eighteen months engaged in an unrequited romance with Federal Reserve rate cuts.
Short-term bonds are having a terrible month
The month of February 2023 will be recorded across fixed-income trading floors as an unmitigated bloodbath for short-term sovereign debt.
Special Report
Lunar New Year: China's reopening lifts the yuan
The Lunar New Year celebration coincided with a dramatic financial renaissance for the Chinese currency.
Banks' easy profits are about to end
The fourth-quarter earnings season for America’s largest commercial banks brought a deluge of record headline profits, powered by an immaculate expansion in net interest income (NII).
Japan spends trillions to defend one number
The Bank of Japan is engaged in one of the most audacious institutional interventions in modern financial history.
Germany's bond shortage is finally easing
For the better part of seven years, the European sovereign repo market was haunted by an artificial pathology: an acute scarcity of German Bunds.
Special Report
New Year's Eve: The year the classic portfolio failed
For four decades, the traditional 60/40 balanced portfolio was the bedrock of institutional asset allocation.
Is the recession alarm broken?
The yield curve is the bond market’s most revered oracle, and throughout late 2022 it has been screaming danger.
Special Report
Christmas: Why markets go quiet — and fragile — at year-end
As the trading year draws to its traditional close, financial markets enter a ritualized phase of quiet that casual observers mistake for tranquility.
The debt bill companies have pushed to 2024
In the high-yield corporate credit market, 2022 will be remembered as the year the primary window slammed shut.
Japan surprises everyone, and bonds everywhere feel it
Haruhiko Kuroda's final months at the helm of the Bank of Japan were supposed to be a quiet exercise in institutional continuity.
The Fed and the market disagree. Someone is wrong
The Federal Open Market Committee raised the benchmark policy rate to a range of 4.25 to 4.50 per cent in December and published a Summary of Economic Projections that penciled in a terminal rate of 5.1 per cent for 2023.
Has the dollar peaked?
The US dollar’s historic surge across 2022 was an immaculate reflection of monetary divergence and terms-of-trade superiority.
Special Report
Black Friday: Shop now, pay later, default sooner
As the holiday shopping season officially launches with the retail ritual of Black Friday, shopping malls and digital storefronts are bustling with promotional activity.
The bond market is screaming recession
For more than four decades, the slope of the US sovereign yield curve has served as the financial markets' most reliable predictive mechanism for the business cycle.
One good inflation report does not make a trend
The release of the October consumer price index on 10 November ignited the most ferocious global asset rally of the year.
FTX spent its customers' money. That was the business
The swift and total collapse of FTX, culminating in its Chapter 11 bankruptcy filing on 11 November, will be recorded as one of the most brazen balance-sheet frauds in modern commercial history.
Special Report
Halloween: The scariest year for bonds in memory
As financial markets arrive at Halloween, the traditional portfolio allocations constructed over four decades of benign disinflation are nursing losses of historic proportions.
Meta's spending spree just cost it a quarter of its value
There is a specific, cold clarity to corporate earnings reports when the market-clearing multiple on a company’s cash flow collapses in a single overnight session.
Is the world's safest market becoming hard to trade?
When the custodian of the world's pre-eminent risk-free asset publicly voices concern about its day-to-day liquidity, market participants ought to take note.
Special Report
Diwali: India's gold habit is weighing on the rupee
As millions of Indian households celebrate Diwali on 24 October, shopping districts across Mumbai and New Delhi are witnessing the customary festive surge in gold purchases.
Bond investors want to be paid for waiting again
For more than a decade, the international bond market operated under a state of financial repression so profound that investors routinely accepted negative real returns for the privilege of parking capital in sovereign paper.
Banks are stuck holding Elon Musk's Twitter debt
When Elon Musk signed a definitive merger agreement to acquire Twitter for $44 billion in April, Wall Street's premier investment banks celebrated what appeared to be the underwriting coup of the year.
