Summary:
How many times have you heard that one before, "The end is near"? However, euphoria was quickly followed by realism, at least in some quarters. The March 2007 eurodollars futures contract rallied over the week ...by a grand total of 6.5 basis points. Instead of the end being at hand, it seems more likely that the Fed's impending halt to its increase in interest rates will be more akin to the pause that refreshes.
How many times have you heard that one before, "The end is near"? However, euphoria was quickly followed by realism, at least in some quarters. The March 2007 eurodollars futures contract rallied over the week ...by a grand total of 6.5 basis points. Instead of the end being at hand, it seems more likely that the Fed's impending halt to its increase in interest rates will be more akin to the pause that refreshes.
An essay by Jennifer Ablan in Barron's 4/24/06 made the same point I've made for quite some time, namely that the Fed's rate hikes have not been mirrored by an increase in yields on junk bonds or emerging market debt. Instead, spreads to Treasuries have contracted enough to offset the rise in Treasury yields. J.P. Morgan EMBI+ index of emerging market debt returned.....
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