Archive for February 2019

Spreading Money Markets with SOFR, Fed Funds and Eurodollars

Exhibit 1: U.S. Treasury Bill Issuance (from SIFMA) A recent JP Morgan analysis documents the positive correlative relationship between the EFFR-IOER spread and supply of outstanding Treasury bills (Exhibit 2).  Among the implications is that the LIBOR-OIS spread can turn volatile, not only in response to bank credit swings but also during times when banks…

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United States Wins WTO Dispute Finding China Provides Excessive Government Support to its Grain Producers

USDA

Washington, DC – U.S. Trade Representative Robert Lighthizer and Secretary of Agriculture Sonny Perdue announced today that a World Trade Organization (WTO) dispute settlement panel found that China has provided trade distorting domestic support to its grain producers well in excess of its commitments under WTO rules.  China’s market price support policy artificially raises Chinese prices…

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USDA Announces Investments to Improve Rural Electric Infrastructure and Finance Smart Grid Technologies

USDA

More than 6,200 customers will benefit from improved or new service WASHINGTON, Feb. 28, 2019 – Acting Assistant to the Secretary for Rural Development Joel Baxley today announced that USDA is investing $122 million to expand and upgrade rural electric systems in Arkansas, Florida, Indiana, Oklahoma and South Dakota. The funding includes more than $7…

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Big Challenges for Equities, Bonds and FX Markets

Moreover, the actual question on any new referendum ballot will be the subject of intense debate. If there is a new referendum, the question on the ballot is unlikely to be as simple as “Leave” or “Remain”. The question may be worded to involve a specific choice, such as “Remain” or “Exit with Prime Minister…

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Hedging Repo Exposure in the Treasury Basis with One-Month SOFR Futures

A Treasury repurchase agreement (“repo”) is a key element of any Treasury cash/futures basis trade.  For example, being long a Treasury cash/futures basis position involves a long position in cheapest to deliver (or another note/bond eligible for delivery) Treasury note/bond and a DV01 weighted short position in the futures contract. The long basis typically involves…

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Why SONIA is bored of Brexit

UK interest rate markets responded much less than GBP to the Brexit referendum in 2016. Both short-term and long-term rates fell on the news that the “leave” vote had carried the day, correctly anticipating that the Bank of England (BoE) would ease policy. Unlike the GBP, however, rates quickly recovered to their previous levels and…

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February Ags Update

Data as of December 31, 2018, unless otherwise specified* As of January 31, 2019 Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act.…

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Fed to End Diet

About the Presenter Bluford “Blu” Putnam has served as Managing Director and Chief Economist of CME Group since May 2011. With more than 35 years of experience in the financial services industry and concentrations in central banking, investment research, and portfolio management, Blu serves as CME Group’s spokesperson on global economic conditions. View more reports…

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Members of the 2020 Dietary Guidelines Advisory Committee Announced

USDA

Scientific Experts Will Review Scientific Evidence on Key Nutrition Topics to Inform Development of New Guidelines WASHINGTON, Feb. 21, 2019 – To ensure America’s dietary guidance reflects the latest science, U.S. Secretary of Agriculture Sonny Perdue and U.S. Health and Human Services (HHS) Secretary Alex Azar today announced the appointment of 20 nationally recognized scientists…

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