EXCHANGE CORNER

Fed Snaps Up Nearly Half of $3.4 Trillion H1 Debt Sales By Blu Putnam, Chief Economist, CME Group Highlights Fed bought 46% of US Treasury’s $3.4 trillion in H1 debt sales. Fusion of monetary, fiscal policies lowered Treasury market volatility. Treasury yield curve is now a combination of demand and Fed policy. Is yield curve … Read More

Stimulus solidarity rallies euro & implications of US borrowing over $3T By Blu Putnam, Chief Economist, CME Group Euro Rallies Amid Europe’s Pandemic Response EU members to collectively raise 750 billion euros from bonds issued. Ground-breaking move to stimulate sagging economy rallies euro. Debt issuance binds 27 EU members in a coordinated fiscal initiative. Member-nations hit … Read More

Fed Pauses, Evaluates Pandemic Response By Blu Putnam, Chief Economist, CME Group Highlights Fed reduces support for primary bonds dealers as liquidity rebounds. Fed swap lines to central banks drawn down as demand wanes. Did Fed purchase of Treasury notes, bills impact shape of yield curve? Fed activity has substantially changed sentiment in Treasuries market. … Read More

Seven outcomes of the Fed’s pandemic response By Blu Putnam, Chief Economist, CME Group Highlights Fed asset purchases dampened volatility in long-term Treasury securities. Sentiment in US Treasuries has shifted from “Anxious” to “Complacent.” Change in sentiment reflects investor confidence in Fed’s actions. Market participants expect Fed to keep rates low for a long time. … Read More

Economic Spotlight: New Zealand and Australia’s Currencies By Erik Norland, Senior Economist, CME Group Highlights AUD is down 31% vs. USD since 2011, NZD is down 15%. NZD has outpaced AUD amid more robust growth, better export prices. NZD tracks EUR more closely than AUD due to export competitiveness. Interest rates in New Zealand and … Read More