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Top stories summarized by our editors
Top stories summarized by our editors

SOFR-linked derivatives trading up 78% in Aug.

9/13/2021

As the phase-out of the London interbank offered rate approaches at year end, derivatives trading linked to the Secured Overnight Financing Rate increased by 78% in August, says TD Securities. "The [US Commodity Futures Trading Commission's] SOFR First initiative was a key step toward supercharging growth in SOFR derivatives trading," says Alternative Reference Rates Committee head Tom Wipf.

Investors await Fed reaction to positive jobs report

7/12/2021

Positive data on hiring in June has given markets a boost but has led to speculation on whether the Federal Reserve needs to taper economic support and to increase interest rates sooner than planned. The situation presents a challenge for the Fed: "If the data is better, normally that should mean higher rates, but if the Fed is forced to exit faster, that would slow down the economy," says Priya Misra, head of global rates strategy at TD Securities.

Investors await Fed reaction to positive jobs report

7/6/2021

Positive data on hiring in June has given markets a boost but has led to speculation on whether the Federal Reserve needs to taper economic support and to increase interest rates sooner than planned. The situation presents a challenge for the Fed: "If the data is better, normally that should mean higher rates, but if the Fed is forced to exit faster, that would slow down the economy," says Priya Misra, head of global rates strategy at TD Securities.

Rate increase prompts record $756B reverse repo inflow

6/21/2021

The Federal Reserve's reverse repo facility saw record inflows of $756 billion Thursday after the Fed had raised the interest rate on such transactions to 0.05% from zero. The surge "demonstrates just how starved investors are for yield," TD Securities strategist Gennadiy Goldberg says.

Rate increase prompts record $756B reverse repo inflow

6/18/2021

The Federal Reserve's reverse repo facility saw record inflows of $756 billion Thursday after the Fed had raised the interest rate on such transactions to 0.05% from zero. The surge "demonstrates just how starved investors are for yield," TD Securities strategist Gennadiy Goldberg says.

Rate increase prompts record $756B reverse repo inflow

6/18/2021

The Federal Reserve's reverse repo facility saw record inflows of $756 billion on Thursday after the Fed raised the interest rate on such transactions from zero to 0.05%. The surge "demonstrates just how starved investors are for yield," said TD Securities' Gennadiy Goldberg.

Treasury yields up slightly ahead of Fed meeting

6/14/2021

The market is priced for a dovish Federal Reserve and a shallow interest-rate increase, but JPMorgan Chase and TD Securities recommend short positions on the 10-year Treasury in advance of a Fed meeting this week. "The pendulum has swung over the current quarter as Treasuries have moved from extremely cheap to extremely rich," according to a note from JPMorgan analysts. A note from Morgan Stanley strategist Guneet Dhingra states, "Given the shift in the mix of inflation from transitory towards sustainable, the risk of a hawkish tilt within the [Federal Open Market Committee] has increased, exposing the rates market to a hawkish surprise."

Markets watch Treasury demand after Fed SLR decision

3/22/2021

Analysts and investors are watching Treasury markets after the Federal Reserve decided not to extend an emergency exemption for the supplementary leverage ratio for Treasury holdings and deposits, as some banks near capital-ratio limits. "It's possible that banks will not be able to backstop markets when they most need to during periods of extreme volatility, and that's the big concern, that the volatile times can become more volatile," says Gennadiy Goldberg, an interest-rate strategist at TD Securities.

Demand for 10-year Treasury creates shortage

3/15/2021

Institutional investors are paying an annual rate of up to 4% to borrow the latest 10-year Treasury note, a departure from normal practice that is exerting pressure on the market for repurchase agreements. "The cost of borrowing securities has skyrocketed in the past few days as the market has been under enormous pressure," says Gennadiy Goldberg, US rates strategist at TD Securities.

Demand for 10-year Treasury creates shortage

3/10/2021

Institutional investors are paying an annual rate of up to 4% to borrow the latest 10-year Treasury note, a departure from normal practice that is exerting pressure on the market for repurchase agreements. "The cost of borrowing securities has skyrocketed in the past few days as the market has been under enormous pressure," says Gennadiy Goldberg, US rates strategist at TD Securities.