Was Last Month’s Fedwire A Coincidence?

The intrigue doesn’t end just there. Rather, what we keep finding, the date that keeps showing up on all the charts, is February 24/25. It’s all over the place. That specific date, right now, the top in reflation (meaning beginning the day following things started to go south) where the euro is concerned, even crude oil (so far as contango on its futures curve) and New Zealand or Aussie dollars.

February 24, meaning right on February 25, copper reached its recent high, too.

As noted the past few days, all these things are related through global money conditions pegged upon perceived risks – liquidity most of all. A flood of central bank dollars, or any dollars, for that matter, liquidity and dollar shortage would never be paramount for any – let alone so many – bank balance sheet setting.

Yet, here it is again and again:

Now that a full month has passed, it’s fair even necessary to go back and review what had happened around February 24/25. What was it? So far as the mainstream had been concerned, the 25th was a Treasury market blowout, the BOND ROUT!!!, the real one this time, picking up steam.

The 5-year UST CMT had blown out by a stunning 19 bps; the 10s shot up by 16 bps. Real yields flew upward, too. Pretty much everything safety related was crushed in the rush toward out-of-control inflation reflecting, surely, Jay’s version of his activities.

But was reflation really becoming the long-predicted inflationary massacre? In light of how things are turning out, and turning around in a wide variety of markets, now, could it have been something else? At the time, I said even the bond market blowup might have been something else (at least its intensity).

You might also remember February 25 for what had shown up out of the blue on February 24: Fedwire.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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