NOSTR Financial Network on Nostr: Watch those auctions! #USA #bonds #economy How the weak 30-year bond auction in the ...
Watch those auctions! #USA #bonds #economy
How the weak 30-year bond auction in the US on October 12, 2023, affected the equity market. Investors sold futures contracts on the S&P 500 index to hedge against rising long-term interest rates, which put downward pressure on the stock prices. Selling in futures was not matched by a similar increase in supply on the thematic side, meaning that investors were not re-shorting their go-to shorts. Finally, fixed-strike volatility rose after the auction, indicating higher uncertainty and risk aversion in the market.
How the weak 30-year bond auction in the US on October 12, 2023, affected the equity market. Investors sold futures contracts on the S&P 500 index to hedge against rising long-term interest rates, which put downward pressure on the stock prices. Selling in futures was not matched by a similar increase in supply on the thematic side, meaning that investors were not re-shorting their go-to shorts. Finally, fixed-strike volatility rose after the auction, indicating higher uncertainty and risk aversion in the market.