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Interest Rates Spike On Emerging-Market Flight

ByKevin Davitt
Published 06/24/2013, 11:26 AM
Updated 07/09/2023, 06:31 AM
CSGN
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HG
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NYF
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CASH
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This matters......a lot:
30-Year Mortgage
And here's another look at Bond fund flows of late/very similar time frame:
Bond-Fund Flows
And here's a look at Credit Suisse's Fixed Income Risk appetite gauge:
Risk Appetite Gauge
Short term, I believe rates have overshot. Longer term, I think this is evidence that the Fed can't stop their MBS/Treasury purchases anytime soon.

Global markets are on edge. Chinese markets came unglued last night -- plunging about 6% and it's now VERY near multi year lows. It will be interesting to see how the Shanghai composite and Copper trade at these levels (around 2,150 and $3.00 respectively).
The Shanghai Index
The VIX (cash) traded JUST BELOW the 52-week highs (made on 12/28). The Month 1 v. Month 2 futures spread is NOT inverted (panic may be abating).

Watch -- THE BONDS. Copper, Brent Crude at 100, and the VIX. The S&Ps are now 7% off recent highs.

Consider: Selling Mo 1 VIX v. Buying Month 2 VIX around EVEN.

Consider: Selling August OTM put/put spreads in RBOB or getting Long Aug RB v. Short Aug Heating Oil.

Consider: Selling short dated OTM puts/put spreads in the Bonds. I would not be surprised to hear NY Fed -- Dudley strike a decidedly DOVISH tone when he speaks at 9AM Chicago time on Weds.
Volatility Index
Calendar:
The Week Ahead
**Charts from Sober Look, Credit Suisse, Bloomberg, Yahoo Finance**

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