US Treasury

S&P 500 futures are higher, continuing on yesterday's momentum, after European and Asian shares also rose alongside a rebound in oil, as the year-end performance chase appears to be accelerating. There were several different moving parts in a mixed European session, in which early Euro strength gave way to weakness...

... which in turn pushed the Stoxx 600 and US index futures higher, rising above yesterday's session high on negligible volumes. 

Authored by Chris Hamilton via Econimica blog,

I hope this article brings forward important questions about the Federal Reserves role in the US and I openly admit this is by no means a comprehensive article...it simply attempts to begin a broader dialogue about the financial and economic impacts of allowing the Federal Reserve to direct America's economy.

Alexander Hamilton, George Washington’s Treasury Secretary, in his first “Report on the Public Credit” in 1790,

put forth the concepts of “assumption” and “redemption.”

He argued that the federal government should assume the Revolutionary War debt

and pay those debts at “face value” in full to the bearers of such debt on demand.

In order to redeem the $75 million of bonds, Hamilton promoted the creation of a “sinking fund”

that would pay off five percent of the bonds annually.

After two mediocre, tailing auctions, moments ago the Treasury sold $28 billion in 7 year paper in this week's final bond issuance and it was the ugliest of all.

Stopping at a high yield of 2.28%, this was a tail of 0.8bps - the first since July - to the 2.272% When Issued and the highest yield for 7Y paper since January. The Internals were ugly, with the Bid to Cover of 2.391 the lowest since August 2016, and sharply below September's 2.704, as well as the 2.57 past six auction average.

Very quietly, in the last few weeks, cross currency basis swaps (CCBS) related to the dollar have reversed their rise and started moving deeper into negative territory… again. This might not be of much interest to buyers of global equity markets at this point, but it is signalling ominous signs of growing funding stress in the financial “plumbing”.