Bond bulls who enjoyed a rare rally in short-term Treasuries last week might not want to get too comfortable: the world’s biggest debt market is about to be inundated with an unprecedented wave of issuance.
The US Treasury will probably auction about $294 billion of bills and notes this week, its largest slate of supply ever. The $30bn two-year note sale is the biggest since 2014, and comes as the maturity posted just its fourth weekly gain in the last six months. The three and six-month bill offerings remain at record sizes.
It’s a pivotal moment for traders gauging a Treasury market that appears to be range-bound after yields set multi-year highs in recent weeks. Jerome Powell’s first meeting as Federal Reserve chairman largely signalled continuity with Janet Yellen’s gradual path. That makes the market’s reception of swelling US issuance a key to determining whether the bond selloff will resume.
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“These larger auctions are more difficult to digest,” said Thomas Simons, a money-market economist at Jefferies. “But the auctions do OK when they have a concession. It’s even more necessary than it was in the past.”
While there’s evidence of weakening demand for US auctions, an analysis of trading data is mixed at best about whether that portends further losses in Treasuries. But the threat of diminished interest and higher yields comes at a precarious time, with budget deficits climbing and the Fed paring its balance sheet.
US financing needs are growing partly as a result of the tax overhaul. The Treasury is ramping up sales of shorter-term debt, like the maturities to be issued this week, while longer-dated obligations are growing at a slower pace.
The $35bn of five-year notes and $29bn of seven-year debt each match the largest offerings of the maturities since January 2016. In contrast to auctions in recent months, however, this week’s batch comes as the selloff has stalled.
The five-year sale last month yielded 2.658 per cent and the seven-year 2.839 per cent. The yields ended Friday at 2.6 per cent and 2.74 per cent, respectively. If the five-year sale yields less than in February’s auction, it would mark the first drop since August.
Of course, traders may build in a concession to take down the issuance, pushing yields at auction above their multi-year highs.
The results may help investors figure out whether last week’s rally was an aberration in a market otherwise dominated by rising short-term yields and a flattening curve.
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How Apple's credit card works
The Apple Card looks different from a traditional credit card — there's no number on the front and the users' name is etched in metal. The card expands the company's digital Apple Pay services, marrying the physical card to a virtual one and integrating both with the iPhone. Its attributes include quick sign-up, elimination of most fees, strong security protections and cash back.
What does it cost?
Apple says there are no fees associated with the card. That means no late fee, no annual fee, no international fee and no over-the-limit fees. It also said it aims to have among the lowest interest rates in the industry. Users must have an iPhone to use the card, which comes at a cost. But they will earn cash back on their purchases — 3 per cent on Apple purchases, 2 per cent on those with the virtual card and 1 per cent with the physical card. Apple says it is the only card to provide those rewards in real time, so that cash earned can be used immediately.
What will the interest rate be?
The card doesn't come out until summer but Apple has said that as of March, the variable annual percentage rate on the card could be anywhere from 13.24 per cent to 24.24 per cent based on creditworthiness. That's in line with the rest of the market, according to analysts
What about security?
The physical card has no numbers so purchases are made with the embedded chip and the digital version lives in your Apple Wallet on your phone, where it's protected by fingerprints or facial recognition. That means that even if someone steals your phone, they won't be able to use the card to buy things.
Is it easy to use?
Apple says users will be able to sign up for the card in the Wallet app on their iPhone and begin using it almost immediately. It also tracks spending on the phone in a more user-friendly format, eliminating some of the gibberish that fills a traditional credit card statement. Plus it includes some budgeting tools, such as tracking spending and providing estimates of how much interest could be charged on a purchase to help people make an informed decision.
* Associated Press
COMPANY%20PROFILE
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Afghanistan fixtures
- v Australia, today
- v Sri Lanka, Tuesday
- v New Zealand, Saturday,
- v South Africa, June 15
- v England, June 18
- v India, June 22
- v Bangladesh, June 24
- v Pakistan, June 29
- v West Indies, July 4
Points about the fast fashion industry Celine Hajjar wants everyone to know
- Fast fashion is responsible for up to 10 per cent of global carbon emissions
- Fast fashion is responsible for 24 per cent of the world's insecticides
- Synthetic fibres that make up the average garment can take hundreds of years to biodegrade
- Fast fashion labour workers make 80 per cent less than the required salary to live
- 27 million fast fashion workers worldwide suffer from work-related illnesses and diseases
- Hundreds of thousands of fast fashion labourers work without rights or protection and 80 per cent of them are women
US%20federal%20gun%20reform%20since%20Sandy%20Hook
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