Biden Bond Bear
I know of new actions by the new Administration that will push interest rates lower and therefore bond prices higher. Quite the contrary. Note the bear market in bonds which if anything is gathering steam:
But I am playing it by shorting the March 2024 Eurodollar future now trading at 99.07:
I now focus on this contract because the government manipulation of the Eurodollar market seems increasingly to be confined to propping up the futures only out to December 2022 and the March 2024 is the the last contract that can be sold at over 99.
The interest rate bear market tells me the Fed’s ability to hold down interest rates buy their public buying of $120B of Treasuries per month is weakening. Why because the Biden Administration’s borrowing needs I estimate to be @ $500-600B per month when you combine the 2021 deficit combined with refinancing. And I suspect private buyers will require more than today’s still anemic interest to part with their $400B every month. The prospect of the Biden Administration getting anything close to the $1.9T covid stimulous package is a major prop for the bear market in bonds and the March 2024 Eurodollar.
I also have a small short position in the Japanese 10 Year future of March 2021- currently at 151.05 with a buy stocp at 152.
PS: forgive the long gap between posts but the uncertainty about the who won the presidency kept me silent until the inauguration and then I wanted to get a sense of how to speculate on Biden.
PPS: Anyone who thinks Biden won ‘on the up and up’, has not I assume read the Navarro Report: https://navarroreport.com/