Talks continue; stocks and bonds rise
April 14, 2026
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–Sunday night/Monday morning pullbacks in stocks and bonds from failed weekend peace talks were more than reversed yesterday, with ESM currently nearing the level before Iran attacks began. On Feb 25, ESM settled 7013, now 6931. One of my favorite current charts has to be Sandisk (SNDK), which ended 2025 at 237 and vaulted to a new high of 952 yesterday.
–Yields fell with 10s down 2 to 4.295%. SOFR contracts and treasuries all down 1.5 to 3 bps in yield on light volume. However there was a buyer of 50k TY wk1 112c for 11 vs 111-03 with 19d. Settled 13 vs 111-075. (Expires May 1; NFP released on 8-May).
–Late yesterday: (Bloomberg) — The Federal Reserve said Monday it will buy about $25 billion of Treasury bills each month, a greater wind down than anticipated of a program that was meant to ease short-term funding costs by rebuilding reserves in the financial system. …In December, the central bank began buying about $40b of bills each month in a bid to ease the pressures that were building in short term rates. [to make it through tax season].
–Is this slight pare back of liquidity positive? Perhaps withdrawals to pay taxes weren’t as large as expected?
–One quick SOFR note: For most of the day SFRZ6/H7 was -2.5/-2.0 though settlement was -3.0. Dec 31 is on Thursday this year, so the year-end ‘turn’ is longer than usual. (in the old ED days, Dec contracts typically traded at a discount due to year-end funding pressures). Currently, one might conclude that Dec/March is negative due to a lean toward expected easing, which is of course, reasonable. However, SFRZ appears to be trading a bit ‘rich’. SFRU6/Z6 settled -4.5, Z6/H7 -3.0, and H7/M7 -6.0. Prices: U6 9634.5, Z6 9639, H6 9642, M6 9648.0. (buy the double?)
Interesting snippet from recent DOOMBERG:
Although few Western analysts acknowledged it before the current aggression exploded into the open, Iran’s surprising performance thus far is testimony to how much progress it has made in the meantime. Aside from its world-class missile and drone production, Iran is also a significant industrial power, massively outproducing Britain in steel, cement, and ceramics. It produces about as many automobiles as Canada, but with far more localized platforms and components. Ironically, Iran is better prepared to withstand a collapse of the Western-based financial system than virtually any other country, precisely because it has been excluded from it for decades.
