US Customs Border Patrol MQ9 Reaper Drone running the border CA-AZ
SAM039 USAF G5 departed JBA
This AC wuz SAM014 yesterday and went to Peterson AFB for a quick ground stop after an overnight at Richmond Int'l
morning
Treasury To Start Reducing Bond Auction Sizes As Soon As November
Heading into today's quarterly refunding announcement, the bond market was on edge over the (low) possibility widely discussed on sellside desks, that the Treasury could cut trim coupon auction sizes in the next few months to coincide with the Fed's tapering as the Treasury's funding needs have gradually emerged to be less than expected thanks to higher than expected tax revenues. In fact, according to some the drop in yields in recent weeks has been not due to the ongoing monster squeeze but due to expectations that there will be less TSY supply than demand.
So when the Treasury released its latest refunding statement (whose highlights hit about 10 mins early after some newswire broke the embargo), battered TSY bears breathed a sigh of relief because the Treasury said that contrary growing expectations, it "does not anticipate making any changes to nominal coupon and FRN auction sizes over the next quarter." Here is the proposed treasury issuance scheduled for Q3-see cap#2
However, in line with expectations, "continuing current issuance sizes and patterns may provide more borrowing capacity than is needed to address borrowing needs over the intermediate-to-long term." As a result, the "Treasury will continue to engage with a variety of market participants to better understand the supply and demand dynamics for existing securities, with an expectation of announcing an initial set of auction size reductions as soon as the November refunding announcement" which is also in line with what most Primary Dealers had expected (among the 24 primary dealers in U.S. government securities, just three expected smaller auctions during the August-to-October quarter, with many more seeing an announcement in November). In other words, shortly after the Fed's taper announcement at or just after Jackson Hole, the Treasury will follow up with an issuance cut of its own.
So if no changes in coupon sizes, will Bill issuance at least shrink? You bet: as the Treasury added, "seasonal or unexpected variations in borrowing needs over the next quarter is to be met by changes in bill auction sizes and Cash Management Bills (CMBs)." Additionally, the Treasury will end weekly issuance of 6-week CMBs later this month: (cause why would you buy those if you can park yer 'unwanted cash' at the FRBNY for 5 basis points guaranteed-they know this)
Also of note, now that the US has triggered the debt ceiling extension measures which have an impact on how much cash the Treasury can hold at the current moment ($450BN), the Treasury said that it is unsure how long extraordinary measures put in place due to the debt ceiling will last: As Secretary Yellen recently outlined in a July 23 letter to Congress, the period of time that extraordinary measures may last is subject to considerable uncertainty due to a variety of factors, including the challenges of forecasting the payments and receipts of the U.S. government months into the future, exacerbated by the heightened uncertainty in payments and receipts related to the economic impact of the pandemic. Given this, Treasury is not able to currently provide a specific estimate of how long extraordinary measures will last.
While it was of secondary importance, the Treasury also revealed the details of next week's auctions a/k/a the quarterly refunding offering, which was in line with expectations. Specifically, the Treasury will offer $126 billion of Treasuries to refund $58.6 billion of Treasury notes and bonds maturing on August 15, 2021. This issuance will raise new cash of approximately $67.4 billion. The securities are:
*A 3-year note in the amount of $58 billion, as expected
*A 10-year note in the amount of $41 billion, as expected
*A 30-year bond in the amount of $27 billion, as expected
moar
https://www.zerohedge.com/markets/treasury-start-reducing-bond-auction-sizes-soon-november
Fed's Clarida backs raising interest rates in 2023
The Federal Reserve should be in the position to begin raising interest rates in 2023, Fed Vice Chair Richard Clarida said on Wednesday, as he predicted the U.S. economy remains on track to meet the central bank’s employment and inflation goals.
“I believe that these ... necessary conditions for raising the target range for the federal funds rate will have been met by year-end 2022,” Clarida said in prepared remarks for a webcast discussion hosted by the Peterson Institute for International Economics. “Commencing policy normalization in 2023 would, under these conditions, be entirely consistent with our new flexible average inflation targeting framework.” Fed officials hold a range of views on when to begin raising the central bank’s benchmark overnight interest rate, which is currently near zero, but several of them have sped up their forecast timeline for doing so. According to quarterly projections released at the Fed’s June policy meeting, thirteen of 18 policymakers now see rates higher in 2023, with seven of them penciling in a rates ‘lift-off’ as soon as next year.
Inflation continues to run well above the Fed’s 2% flexible goal, but there are still 6.8 million fewer people employed than just before the onset of the coronavirus pandemic. Fed Chair Jerome Powell said last week that the jobs recovery was still “a ways off” from where it needed to be to raise interest rates but acknowledged the central bank was monitoring inflation carefully to make sure the current overshoot is not persistent. In his prepared remarks on Wednesday, Clarida said he expects the Fed’s full employment mandate to have been met by the end of 2022. While he still expects current high inflation readings to moderate, if the Fed’s preferred inflation gauge comes in above 3% this year, he also said he would consider that more than a moderate overshoot of the Fed’s inflation goal. “I believe that the risks to my outlook for inflation are to the upside,” Clarida said.
He also noted the rapid spread of the Delta variant of the coronavirus is “clearly” a downside risk, but added that the current projections for U.S. gross domestic product growth this year “would be the most rapid return following a recession to ... the trend level of real GDP in 50 years.”
https://www.reuters.com/article/usa-fed-clarida/feds-clarida-backs-raising-interest-rates-in-2023-idUSW1N2OA026
https://www.marketwatch.com/investing/bond/tmubmusd10y
Baker Hughes Company sold by General Electric Co.: $1.254B-August 3
from July 30, 2021
Baker Hughes Company Announces $2 Billion Share Repurchase Authorization
Baker Hughes Company (NYSE: BKR) ("Baker Hughes" or the "Company") announced today that its Board of Directors has authorized Baker Hughes Holdings LLC (“BHH LLC”) to repurchase up to $2 billion of its common units. The Company will use the proceeds from the sale of its BHH LLC common units to repurchase its Class A shares. Baker Hughes and BHH LLC are also authorized to enter into an agreement with GE whereby BHH LLC will repurchase its common units from GE on a pro rata basis and on the same terms as it repurchases common units from Baker Hughes. The proceeds distributed to Baker Hughes will be used to repurchase Class A shares on the open market or in privately negotiated transactions. The repurchases are not expected to materially change Baker Hughes and GE’s relative economic interests in BHH LLC or Baker Hughes’ Class A and Class B stockholders’ relative voting interest. Baker Hughes expects to fund the repurchase program from cash generated from operations. The exact number of shares to be repurchased by the Company is not guaranteed. The Company expects to make share repurchases from time to time subject to the Company’s capital plan, market conditions, and other factors, including legal and regulatory restrictions and required approvals. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date.
https://investors.bakerhughes.com/news-releases/news-release-details/baker-hughes-company-announces-2-billion-share-repurchase
Baker Hughes Company is an energy technology company. The Company operates through four business segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS). OFS designs and manufactures products and services for onshore and offshore oil and gas operations across the lifecycle of a well, including exploration, drilling, evaluation, completion, production, intervention and abandonment. OFE provides a portfolio of mission critical products and services utilized during drilling and over the life of a field. TPS provides equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry and energy industry. DS combines hardware technologies with enterprise-class software products and analytics to connect industrial assets, providing customers with the data, safety and security. The Company distributes products and services to oil and gas markets. Number of employees : 55 000 people.
https://www.marketscreener.com/quote/stock/BAKER-HUGHES-COMPANY-40311111/company/
https://finviz.com/insidertrading.ashx?oc=40545&tc=7&b=2
Boeing 737 Max heads to China for key test to end flight ban
A Boeing Co. 737 Max jet is slated to leave for China within an hour to conduct a flight test for regulators, people familiar with the matter said, a step toward lifting the plane’s more than two-year grounding in the country following two fatal crashes. The 737-7 is scheduled to take off from Seattle’s Boeing Field at around 8 a.m. local time, bound for John Rodgers Field outside Honolulu, according to FlightRadar24, a flight-tracking site. Boeing didn’t immediately comment.
The Hawaii flight is the first leg of a trip across the Pacific, said the people, who asked not to be named because the matter is private. With the Max also barred from Russian airspace, the narrow-body plane will travel near the equator to China rather than take the shorter northern crossing that is typically flown by commercial aircraft. While the Max’s validation flight in China would be a milestone, the country’s regulators still could take months to wrap up their work before allowing the plane to resume commercial service. Boeing sent a delegation of around 35 pilots and engineers to the nation last month to meet with regulators and prepare for simulator and flight testing.
The stakes are enormous for Boeing, which hasn’t logged a major jet order from China in years as trade tensions simmered. The resumption of Max deliveries would bolster the company’s plans to speed production of its principal money maker as demand recovers from a global pandemic and a worldwide flying ban on the model.
About 175 nations have cleared the Max to resume service after Boeing redesigned a flight-control system linked to crashes in late 2018 and early 2019 that killed 346 people. Chief Executive Officer Dave Calhoun has been upbeat about prospects for the planemaker and the Max in China, after U.S. Deputy Secretary of State Wendy Sherman traveled to the country for diplomatic meetings. The Max will be cleared to fly in China and the rest of the globe by year-end, Calhoun said during the company’s earnings call last month. With the Winter Olympics looming and the effects of the COVID-19 pandemic hopefully receding, China’s airlines are clamoring to get the Max back in service, he said. Talks with CAAC, China’s air regulator, have been encouraging and constructive, Calhoun said.
https://www.bnnbloomberg.ca/boeing-737-max-heads-to-china-for-key-test-to-end-flight-ban-1.1636475
Mexico Sues Smith & Wesson and Glock Over Smuggled Firearms
Mexico filed a lawsuit in a U.S. court Wednesday against Smith & Wesson Brands, Inc., Glock, Inc., Sturm, Ruger and Co. and other major gun manufacturers, alleging that negligence on their part contributes to arms trafficking south of the border.
The civil suit in a Massachusetts federal district court argues that the companies “wreak havoc in Mexican society, by persistently supplying a torrent of guns to the drug cartels”. “For decades the government and its citizens have been victimized by a deadly flood of military-style and other particularly lethal guns that flows from the U.S. across the border, into criminal hands in Mexico,” the country said in its lawsuit. “This flood is not a natural phenomenon or an inevitable consequence of the gun business or of U.S. gun laws. It is the foreseeable result of the defendants’ deliberate actions and business practices.”
The complaint names U.S.-based manufacturers “whose guns are most often recovered in Mexico”: Smith & Wesson, Glock and Sturm, Ruger and Co., Beretta U.S.A. Corp, Colt’s Manufacturing Company LLC and Century International Arms Inc. It also names Barrett, saying its .50-caliber sniper rifle “is a weapon of war prized by the drug cartels,” and Interstate Arms, a wholesaler. Smith & Wesson, Glock and Sturm, Ruger and Co. didn’t immediately reply to written requests for comment. In 2019, 17,000 Mexican citizens were murdered with guns manufactured in the U.S., compared to 14,000 citizens of the U.S. itself. This is despite Mexico having a smaller population and only one gun store, according to the suit. Mexico has long argued that gun smuggling from the U.S. needs to be addressed alongside the fight against drug trafficking, and President Andres Manuel Lopez Obrador’s government has raised the question with U.S. officials.
The country said it was suing “to put an end to the massive damage” that the gun makers cause by enabling the flow of weapons across the U.S.’s southern border, saying that almost all of the firearms recovered at crime scenes in Mexico come from the north.
https://www.bnnbloomberg.ca/mexico-sues-smith-wesson-and-glock-over-smuggled-firearms-1.1636543
Suing the wrong people...go after Hussein and Holder.
Senior US diplomat Sherman speaks with Myanmar shadow government
Deputy Secretary of State Wendy Sherman spoke on Wednesday with a representative of Myanmar's government in exile, the first announced contact between a senior U.S. official and the rival administration to the generals who overthrew a democratically elected government.
The State Department said Sherman spoke with Zin Mar Aung, who has been appointed acting foreign minister in the shadow National Unity Government for Myanmar, also known as Burma. "They discussed ongoing efforts to return Burma to a path to democracy, including continued U.S. support for the pro-democracy movement," its statement said. "In addition, they discussed efforts to combat rising COVID-19 infections in Burma and to provide critical humanitarian assistance to the people of Burma."
Hours earlier, U.S. Secretary of State Antony Blinken met virtually with counterparts from the Association of Southeast Asian Nations and called on them to take joint action to urge the military to end violence, the State Department said. He also urged the group's foreign ministers to push for Myanmar to "release all those unjustly detained, and restore Burma's path to democracy," the earlier statement said.
https://asia.nikkei.com/Politics/International-relations/Senior-US-diplomat-Sherman-speaks-with-Myanmar-shadow-government
Russia Captures No. 2 Rank Among Foreign Oil Suppliers to U.S.
Russia is supplying more oil to the U.S. than any other foreign producer aside from Canada as American refiners scour the globe for gasoline-rich feedstocks to feed surging motor-fuel demand.
U.S. imports of crude and refined petroleum products from its former Cold War adversary surged 23% in May to 844,000 barrels a day from the prior month, government data showed. Mexico was edged out of the No. 2 spot as its shipments to its northern neighbor rose by less than 3%. Russia has become a favored source for U.S. fuel makers largely because it producers ample supplies of semi-refined oils such as Mazut 100, an ideal feedstock for American refineries accustomed to processing thick, sludgy crude from Venezuela and the Middle East. Cargoes from the former dried up due to sanctions, and OPEC-orchestrated output limits have crimped shipments from the latter, leaving an opening for Russian exporters.
The rise in Russian shipments is happening despite intensifying rancor between Washington and the Kremlin over a controversial pipeline that will haul Siberian gas to Germany. But in the absence of actual sanctions, U.S. companies are not bound by the diplomatic and geopolitical goals of the White House. Russian feedstock “seems to be functioning as a good substitute for Venezuelan oil, particularly in the high-demand summer season,” said Shirin Lakhani, a senior oil analyst at Rapidan Energy Group. Despite Russia’s ascendence, it’s no threat to Canada’s preeminence as the largest foreign crude supplier to the world’s biggest economy. In fact, Canada accounts for almost half of U.S. imports, delivering almost five times as much as Russia, the data showed.
Nevertheless, the importance of the U.S. market looms large in Moscow, where Federal Customs Service records show America is the single largest buyer of the nation’s heavy-oil products, the category that includes Mazut 100. U.S. buyers absorbed almost one-fifth of Russian heavy-oil exports during the first five months of the year. Most of the U.S.-bound Russian crude has docked along the West Coast to feed refineries like Phillips 66’s plant 100 miles (160 kilometers) north of Seattle and California refineries owned by Chevron Corp. and Valero Energy Corp., government data showed.
Refiners in Texas and Louisiana also have been buying Russian oil products; just last week, 1.5 million barrels from the Black and Baltic seas landed in the region. The influx was substantial enough to cut prices at the Houston Ship Channel by 3% earlier this week.
https://www.bnnbloomberg.ca/russia-captures-no-2-rank-among-foreign-oil-suppliers-to-u-s-1.1636599