Are we at peak rates for T-Bills?

(Bloomberg)

China sales
Chinese investors offloaded the most US bonds and stocks in four years in August, fueling speculation the authorities may have moved to beef up their war chest to defend a weakening yuan.

The bulk of the $21.2 billion of sales were in Treasuries and US equities, with funds in the Asian nation also cutting holdings of agency debt, according to data from the US Department of the Treasury released on Wednesday. In August, the onshore yuan tumbled to its lowest against the dollar since November, prompting Beijing to tell state-owned banks to step up intervention in the currency market.

 

Did Bill Ackman agree with me today?

" @BillAckman We covered our bond short. "

 

BRN gets 'em every time.

But I'm thinking one poke above 5% before any kind of real correction.

 

I expect it to continue up until the FOMC. I expect a pause and then a hold for the Santa Claus rally but then it will restart again next year.

 

im trying to learn more about rates and understanding the bond market. what does it mean that the 5Y auction today priced 20BPs higher than last time? why is that important?

 

The FED in QT unravelling mode, Fed Gubmint issuing more and more debt, some overseas buyers curtailing their purchases somewhat, causes rates to rise and rise. Though the actual BPs (20 bps) jump is in line with the prior (23 bps) auction, they are actually on the lower scale of jumps this year.

 

Am I right?

 

Everyone seems to agree which means rates haven't peaked. War in Ukraine means Wheat & Fertilizers will be elevated for a while. Potential 1973 type war in the Middle East means elevated Crude & RBOB prices.

 

I'd agree with this. On the one hand you have (or recently had) large trend-following shorts creating the possibility of a squeeze, but I'd say that "top in rates" is basically consensus, and every trader and HF out there is just looking to snag the bottom in TLT for a quick rocket-ride higher. That seems to imply a grinding bottoming process with many false starts followed by small lower lows, until one day the dam breaks (in the form of crashing econ data, or a financial accident) and the trade pays.

 

For a few days. Yields are going through its correction cycle.

The next jobs report is going to look different with the UAW strikes over.