that is a great spot to short 10 year treasury futures.e have been primarily shorting two and five-year futures and hedging with arise etf and things like that, and it has worked out very will. you can be nimble in those types of trades. the corporate spreads seem to widen out when that happens as the curve flattens from these different little tantrums that come out between us and china. you can take advantage of that and see some sort of breakthrough. any kind of breakthrough or relief on the trade front and you can see the curve steepen back out. it creates a trading range. jonathan: do you see a catalyst for sustainable steepening in the yield curve at all? krishna: no, sustainable steepening will come after the recession or just before the recession, when people expect the federal reserve to get into a substantial easing mode. until then, nothing has really changed. i think in terms of trading opportunities, the thing that has cheapened the most is basically emerging market assets across the board. so the contrast between u.s. high-yie

jonathan: we have to plug this into the treasury market.s this change anything for the team at hsbc? mary: not so far. in terms of credit or high-yield. last time, we talked about how well u.s. high-yield have held up. we haven't been changing too much of what we have been doing. maybe a little bit in the emerging market side, but for the u.s., not seeing too much to move us. jonathan: once again we have a week dominating the news flow. it is the trade story. i have asked several investors on the supply side, will it change anything they have done this year in terms of allocating capital base of how the story has evolved? have you? bryce: i think the trade story is the gift that keeps giving. every time there is rhetoric in -- rhetoric out there and corporate bonds falter, you can take advantage of that. that seems like the bark is worse than the bite. it is not as big a deal economically as what maybe people would like you to believe. i think the volatility is creating opportunities for us. while i'm not really a fan of it and wish we did

treasuries, russia is selling treasuries. is not a big deal.nly when you get into the top two or three holders are you going to drive sellers hire. >> i want to ask important question. high-yield -- cycle, yourthis view on that and how you think this plays out from here. so, in the context that we are slowly getting less and less bullish rather than more bearish, we would be selling u.s. high-yield here. it is a case of rebalancing your portfolio. stuff to highlity leverage the addition that a lot of these companies are in. is that 2020 story of hitting attentional real slow increase. it is a trade which we will be doing all next year. be a lot ofto people struggle with the idea that high-yield -- when the junk is done what it has already done so far this year. >> i think that play is about done. you are not getting paid for the risk. if you are going to see that happen, i would move up into a higher grade. four to five years max. kevin, sticking with me alongside george. and luke. markets.with me in the through this week. to's come tens. shapi

jonathan: the treasury has not had a problem coming to market. other dynamic is the competition for capital. a lot of people come on this program and say, we have a real competition for capital now. does 2% really get it done? mary: if you think about the cash,ion rate and holding it is not unattractive to hold to your treasuries versus parts of the market. if you are going to try to earn an income and earn something off your investment, he probably still need to try to reinvest at a higher rate than that. lothna: 2% does not sound a but you are not investing in treasuries to get rich. 3%is not high relative to for locking in your money for 10 years, is meaningfully higher. the flatness of the curve certainly gets people attracted to the front end of the market. jonathan: a lot of people want to be in a highly liquid security, freddie to allocate capital when things turn over. i have been hearing that argument for a long, long time. things are not turning over. high-yield credit look strong. looking at a load of funds being raised to allocate cap

treasuries here?hen you have a massive net short position in anything, it sets you up for rebound at some point in the future hey, think tesla, right? because sooner or later, the short sell groergs s are going o ring the register. basically, garner thinks this trade has gotten overcrowded that's key term when you talk about short selling. overcrowded. and when the shorts are unwinding their positions, therefore it's going to create a fierce rally next, take a look at this chart, which shows the seasonal patterns that we're dealing with the seasonal patterns of the ten-year this is a very important concept of how it's done in the past historically speaking, treasuries tend to rally in the late summer and early fall garner's experience is one of the largest seasonal patterns around and tends to be pretty unforgiving. she knows from experience because she once blew up her parents' speculative trading account trying to fight. this that would certainly be a mistake. during the second half of the year, the

guy: good lock warns of a massive treasury squeeze. the latest data shows net short positions at the highest on record. reports suggest turkey has tried to the the release of -- u.s. investigation. washington appears to have rejected the offer. another big week for turkey despite the holidays. israel's soda stream for $3.2 billion. how much will the firm pop at the open? matt: let's look at european equity index futures. they are pointing to mild gains this morning. futureseuro stocks 50 pointing to a gain of 1%. ftse a little bit less so. i almost hesitate to show you treasuries because there is so little movement in the 10 year. you mentioned gridlock -- gundlach. record shorts in the treasury market at the same time everyone is so long the dollar right now. one of those things has got to it --nd gunned lock -- gundlach is worried. the s&p closed, shanghai market opened. there was a point where there was a possibility that the price action in china was more and more negative. it has bounced a little bit. an interesting set up. we are

lisa: mike is adding treasuries.ondering, from where you said, do you see yields on the longer and continuing to decline relative to short ends? will we get a yield curve inversion sooner than later? priya: inversion, we are a little bit away from. i think the curve will continue to flatten. the biggest risk about -- around the flatten, the fed will continue to hike rates. think the fed could hike faster than what is priced in. i can move the front and higher. that is the reason for the continued flattening. story.on is a different i think for inversion coming you need the fed to go above neutral. if the fed is taking the fund rate above 3%, they need an inverted curve. lisa: we have a steady range that the treasury has traded in over the past quarter. the next move, up higher or lawyer -- or lower? priya: i think higher, just given we are near the low end of the range. we have been looking for the 3% all year as being a ceiling on the tenure. higher, butle bit not much. everyone is sticking with me. priya misra, mic

treasury as well.e are looking at 3 or 3.25 to the end of this year, and the trade is certainly too short treasuries, longer dollar versus everything else. i am not sure if i would want to be playing a spread between the u.s. and other parts of the world. there is so much else going on, but being u.s. centric, there is plenty to do there already. jonathan: does that make sense to you? >> it does. but it comes back to the basics. unless we see a weaker dollar, unless we see some form of inflation, yields are not going to go up a whole lot. probably the worse short in the world is the 10-year because of all the other reasons we have driven yields down to 10 basis points. jonathan: the spread to u.s. treasuries, i think they are the widest since early 2016 we had a real concern in china and emerging markets. does that differential between emerging markets and the united states add up to you? >> again, i have to go back to the strength of the dollar. it is creating this differential. why are treasuries mor

treasury's -- is not a big deal. top three are two sellers that is not a big deal it is going to drive yields higher. jon: high yield is trading to its tightest in investment grade in the united states. your view one, that chart and how you think this plays out from here. so, in the context that we are slowly getting less and less bullish rather than more and more bearish, we would be selling to u.s. high-yield here. if the rebalance -- case portfolio tog your recognize the high leverage position that a lot of these companies are in, and it is that 2020 story of a real slowdown in growth that worries me around that. it is a trade that we will be doing all next year. jon: it seems to be that could be the trade for a lot of people because a lot of people struggle with the idea that high-yield when the junk of the junk est has already done what it done -- it has done this year. kevin: if you are going to see that happen, i would move up into a higher grade incorporates. i would be four to five years max and get my back

one of the best things that studying the treasury department is fdr's treasury secretary recorded all of his meetings. in this book i was able to use the treasury department own words and express their frustration. you can read the actual transcripts of what they are saying and at the end of december 1943 josiah, a lawyer treasury, and said mr. secretary, the only question we have in our minds, i think, are the bowl has to be taken by the horns in dealing with this jewish issue. get this thing out of the state department into some agencies hands that is willing to do with it frontally. for instance, take the complaint and whatever you do with the juice? we let them die because we don't know what to do with them. another staff member added we are speaking as citizens now. armed with their evidence the treasury department wrote a new report titling the report to the secretary on the acquiescence of this government in the murder of the jews. this is a dc town and a lot of us have read government and that is not generally the title of these reports but it began one of the greatest crimes

treasury house frozen millions of dollars worth of russian assets or washington correspondents america has more samir it's getting harder to keep up with the rate of sanctions washington's imposing what do we know about this latest statement from the treasury well the treasury department did explain it all and its statement saying that these efforts have been taken in order to counter russia's efforts to challenge the u.s. and its allies listing a few examples including the occupation of crimea subverting western democracy its neighboring the assad regime just to name a few now in the statement to the treasury department also reiterated how well they're saying they go away saying quote the treasury's russia sanctions program is among our most effective and impactful since january twenty seventh this administration has sanctioned two hundred seventeen russian related individuals and entities for a broad range of activities check out what else was the bread and brazenness of russia's malign conduct demands a firm and vigorous response our actions are imposing an unprecedented level of fi

, i think said something about dumping treasurys recently but doesn't own a lot of treasurys, and so the impact to them and to the world, just from a sheer price level, would on treasury bonds would be valuable and biger countries aren't going to do it for their own sake. >> hi very interesting, we talk a lot about china we talk a lot about the united states. but what economies countries really concern you let me throw out one venezuela. which give you hope? throw out one azerbijan. >> ten points on web site in january, venezuela was certainly a point of problem for financial perspective and something to definitely look at as argentina, has had problems, continues to have problems as well, as turkey. in terms of points you are looking at something like iceland, something crunches whether they have the opportunity to sort of separate themselves from bankers in their country or sort of investing in their country and to the financial crisis decided, not to, and as a result, at least able to govern their country from the standpoint of their decisions that make sense for the country appro

-- being dollar long and treasury short. a library that takes a look at these. see the way it took off or both of them in june. we have a tendency to be long dollar for much of the last five years. again, mostly short. that's 10 year treasury, just fell off a cliff. went to levels completely out of the ballpark. ,n that sort of a situation trump about a week and a half about how ourng strong dollar was hurting the lira, reminding himself that he doesn't like a strong dollar, on that adds to the pressure people feeling stretched. we got a turnaround. the comments on the fed helped. 10 year yields were already trending down. we just got an alert, on the u.s. of the japan falling below 110 for the first time since june 28, almost two months ago. you can see it, 109 .93. in the meantime, i know we are watching the yuan's movement. after the pboc raised its fixing on monday. what are the details there? >> trump accused china of manipulating its currency, and you have to remember that the yuan is a manipulated currency in that the

well the treasury department did explain it all and its statement saying that these efforts have been taken in order to counter russia's efforts to challenge the u.s. and its allies listing a few examples including the occupation of crimea subverting western democracy its neighboring the assad regime just to name a few now in the statement to the treasury department also reiterated how well they're saying that they go away saying quote the treasury's russia sanctions program is among our most effective and impactful since january twenty seventh this administration has sanctioned two hundred seventeen russian related individuals and entities for a broad range of activities check out what else was the bread and brazenness of russia's malign conduct demands a firm and vigorous response our actions are imposing an unprecedented level of financial pressure on those supporting the kremlin's malign agenda and on the sectors of the russian economy though russia's malign activities continue its adventurism undoubtedly has been checked by the knowledge that we can bring even more economic pain

as the us treasury hints at further punitive measures over moscow's quote malign activity. we can bring even more economic pain to bear and we will not hesitate to do so if its conduct does not demonstrably and significantly change. microsoft claims russian hackers are at it again by targeting u.s. senate and conservative think tanks but while listing the supposed cold hurts the tech giant took the chance to push its own products. and as the syrian army gears up to retake the rebel held unplayed of it live western media outlets warn of a civilian massacre the same outlets though fail to mention that much of the area is under the control of hardline islamist groups accused of war crimes. a very warm welcome to the program from all of us here at r t h q in moscow thanks for joining us this hour. sanctions was definitely the buzz word in washington tuesday with yet more calls to tighten restrictions against russia over a series of issues for which moscow is being blamed the british foreign secretary who's on his first official visit to the u.s. urged western partners to increa

treasury has frozen millions of dollars worth of russian assets or washington correspondents america has more on that so it's getting harder to keep up with the rate of sanctions washington's imposing what do we know about this latest statement from the treasury well the treasury department did explain it all in its statement saying that these efforts have been taken in order to counter russia's efforts to challenge the u.s. and its allies listing a few examples including the occupation of crimea subverting western democracy its neighboring the assad regime just to name a few now in the statement to the treasury department also reiterated how well they're saying go away saying quote the treasury's russia sanctions program is among our most effective and impactful since january. twenty seventeen this administration has sanctioned two hundred seventeen russian related individuals and entities for a broad range of activities check out what else with the bread and brazenness of russia's malign conduct demands a firm and vigorous response our actions are imposing an unprecedented level of

and that is the treasury department.nd they have actively reflected on it. >> thank you for this compelling work. is there any speculation theret? is a a movie about this story? >> i would love that. my agent is over there. >> thank you for being dcription articulate in your description.h jewishr research any fragmentse or events leading to the middle eastern communities? >> because getting public support for the board for in palestin lithuaniae but he is big in thea u.s. during the war. do taking out the beautiful newspaper ads. i don't get fully into what into the book except the white paper web how many jews could enterl s palestine is inundated by thehe british. that supposedly limited how many people could come to limit the number of jews. those that convince the british government not to tell anybodyln but to get them to land in turkey and into palestine. and with the middle eastern politics topoli reverberate with those messy origins act then. and trying to negotiate out to palestine during the war. 8,000? >> cong

treasuries. they're doing other things to prepare for the sanction regime efforts that we might make. what efforts are you aware of that russia is trying to do to prepare and are there other things to counter that prior to issuing of any further sanctions? >> thank you for the question, senator. i think in an open session it is probably unwise not to get into too many specifics about that. but it is safe to assume that the kremlin is preparing for potential future sanctions because they know full well what they intend to do and therefore i assume they can also anticipate that if they continue to do the kinds of things they have done that draw sanctions in the past, that we will continue to react to that. >> and are we in the state department dealing with our european allies who i think are bearing a higher degree of impact to this, are we in a comfortable position that they are going to stay with us, particularly when we talk about nordstream 2, are we going to preclude that? are the russian alli

treasury's. hedge funds and other speculators in new york have cut their bets that are most bearish on gold since 2006. investors of also been pushing back on their holdings. investors fundamentally, the story here, is that investors are going to the dollar rather than precious metals. anna: i am looking at a correlation. the 20 day rolling correlation measure, it is a correlation between what happens with gold and with the dollar. where does the market see gold prices going in the near-term? i think you're absolutely right to point out the correlation. the future of gold this year does depend very much on where the dollar is going. if we see a dollar weakening we could see more upside in gold. but, apart from that, that is the main thing. unless there is something that we have not forecast. it is hard to see gold making head waves. the goal does not pay the interest. the fed is tightening. it is a tightening cycle. it is shrugging its balance sheet. that makes gold even less attractive in that e

the 10 year treasury should be at 4%.teps down, saying it is time for her successor to take over. we are 30 minutes away from the end of the monday session. the european of

treasuries 2/10 and 30. remarkably stable until today.he 10 year treasury yield is down by eight basis point. bidding to the back and as well. three point 03%. your yield on a 30 year. a big week for retail with earnings. economic data as well. this is bloomberg real yield. ♪ >> this is bloomberg real yield. time for the final spread. coming up, we will be keeping an eye on any news around tesla. and a review of elon musk we get retail data. brexit talks. a ton of data coming out of the eurozone. including cpi. retail sales. cpi. a whole lot more. this week, there is a news flow with a really important news from one of the most talented portfolio managers on the planet. now, the major central banks are trying to set -- step away. their influence is being quickly replaced by that of politics for both equity and fixed income investors. we think this means low returns. and higher volatility. space, energies kind of fans out as being a little bit wider. communication with at&t and verizon makeup so much. on the short end of the curve is where

treasuries. there do other things to prepare for this next round of whatever sanctions efforts that we might make. what efforts are you aware of that russia is trying to do to prepare and other things we can do to counter that prior to issuing further sanctions? >> thank you, senator. i think it is unwise to get into specifics. it is safe to assume that they are preparing for potential future sanctions because they know that what they intend to do and i assume they can also anticipate if they continue to do the types of things they've done that have drawn sanctions in the past we will continue to react to that. >> are we in the state department deal with their allies, particularly european allies i think bear a higher degree of impact, are we in a comfortable position that they will stay with us? particularly we talk about proactively. are we trying to do anything to preclude that, or the rationale is hanging in there with us right now and how do you project that as we get further into the sancti

treasury reportedly signed off on this exemption. i sent a letter to the commerce at the point in time asking questions about the decision and one day later the administration reversed its tariff exemption. i was very glad to see that, but can you tell me-- i still have a simple question, how did treasury allow a tariff exemption for the subsidiary of a sanctioned russian company in the first place given that the tariff was meant to protect american suppliers. >> that was a decision by the-- >> so the information you signed off and reverse decisions it's not accurate. >> that's right, senator. >> you're saying it's in the accurate that dependent happen. -- didn't happen. so let me ask the rest of it. meanwhile, treasury is reportedly considering lifting sanctions on rousseau which is sanctioned to for ties to a russian oligarch, and russia in ukraine. treasury secretary mnuchin says he's concerned about the people of rusal. and have they stopped efforts to spread corruption? >> i want to correct one point from your earlier question.

master the master knows themselves and then the master node to get the vote on how to spend that treasury that's correct so you've got like a governance thing baked into the cake that's right and other thing about gas is that it's got this treasury and it's remarkable in a lot of ways and the most remarkable thing that's happening right now and the reason we've got john is what's happening in venezuela can you tell us what's going on yes so we're seeing oh large amount of adoption taking place in venezuela it's grown to become our second largest market and really the reason that we're seeing that type of growth is of course because of what's happening with the ball of are they're expecting a million percent inflation this year in venezuela and this is kind of the the prime example of a broken currency and what what the treasury system allows the community there to do is to organize and to fund a lot of their activities and so we have conferences being held there by community members funded by that treasury we have help desks that people can call in to merchants can call in to for help wit

you see that in this chart showing you gold come be treasuries, -- gold, the treasuries, the market hasort on all three major risk metrics. what does that mean? hard to know for sure. corporate earnings play into it, a lot of positioning and structural issues that plan to this. we are seeing more confidence or maybe complacency? who knows? we are at levels that were higher than this before the january-february selloff. something to watch as the weather we repeat what happened earlier this year. taylor: find that at g tv . i always like the dollar conversation that if i do not pick romaine he may not let me back because he is my cohost. >> rigged. taylor: we will be back with more. this is bloomberg. ♪ taylor: live from new york, i am taylor riggs. romaine: i am romaine bostick. this is the european close on bloomberg markets. hour,: the stock of the and a look at the biggest stories in the news. on a roll, the government says pretax profits that u.s. companies grew 7.7% from a year ago, the most ends 2014 and the seventh straight game with businesses putting cash to use. maker of ja

ahead, steven mnuchin, a look at the president trump's treasury secretary.s is bloomberg. ♪ amanda: this is bloomberg markets. shery ahn: amanda, let's talk about this great business we that we have come a profile of treasury secretary steven mnuchin and his relatively, pretty long tenure as secretary of treasury, 18 months, which can feel it can lifetime and the trump administration. it is only one of very few moderates left in the administration. growing as atant, treasury department are more sanctions, not only against russia but also against turkey. >> it is worth noting the strong dollar policy, the u.s. dollar maintaining its strength, something on the trade file you are but pretty interesting to see p or took over, a little game there. for more bloomberg stories, an issue of bloomberg businessweek, it will be on news stands and digital as well. remember, bloomberg news can interact with all the tribes you see here. from new york and toronto, this is bloomberg. ♪ scarlet: it is 7:00 p.m. in london. i'm scarlet fu. julie: i'm julie hyman. welcome to "bl

the treasury imposed sanctions. the treasury imposed sanctions on companies and individuals. and new laws were passed by congress. the visa restrictions laws as well as the renewal of the iran sanctions act. all of these were in violation of the nuclear deal. in fa ct, violation of the nuclear deal. in fact, iranians, despite the fact they signed on to the agreement, weren't able to send money out of the banks nor bring in money.

treasury hints at tougher measures for moscow's quote maligned activity. we can bring even more economic pain to bear and we will not hesitate to do so if its conduct does not demonstrably and significantly change. also this hour as the syrian army gears up to retake the militant held out enclave of it live western media outlets warn of a civilian massacre the same outlets though fail to mention the area is under the control of jihad this group's accused of more problems. the taliban rained down missiles on central kabul hitting the presidential palace during a live address by the afghan leader who on sunday has proposed a cease fire. this is our to international bring you in your live news update this hour with me jack and welcome to the program sanctions is definitely the buzzword in washington this tuesday with yet more calls to tighten restrictions against russia over a series of issues for which moscow is being blamed now our u.s. correspondents are cross the developments we have killed him up and in new york and samir khan in washington d.c. killed t

treasury auction today, two-year treasury notes. what will the takedown be at what price?attening, does it put more pressure on it? david: how many times have we had this conversation question mark there is more money being borrowed and what will it do? it seems like the demand is there appeared a step in and say they will buy it. alix: it seemed like a calm market, now you are seeing selling across the board and concentrated on the backend. you have yields up by two basis points in the u.s. where with michael mckee, our international correspondent. what do think we will learn today? michael: we will learn what demand is out there. this is only the beginning of a big week. there is $200 billion worth of treasuries going to auction between bills and notes. what impact does that have, not only on demand for the notes, and there seems to be unlimited demand, but how it affects the yield curve, and do we see a flattening because of additional demand coming in? alix: we have seen demand in the supplynd, despite worries we had. there continues to be demand. how low can the sprea

it was actually housed on the third floor of treasury for the treasury department lawyers and 35 wrote assistant secretary -- assistant to secretary john paley served as the direct heir. for the first time in january 1944 comments united states has an official policy about the holocaust and by the end of the war 17 months later they had paid tens of thousands of lives. this keyboard is the first non-self published work. who they were, what they did and how they did it. this seems really strange given that tens of thousands of a published about world war ii and thousands of books about the holocaust are published every year and for the decade i was writing the book i kept expect someone to come behind me and get there first. the three self published books of all, been the last five years and they are all kind of relying on similar older scholarships. why we watch the abandonment of the jews y 6 million died and many of these play this kind of elaborate game of historian telephoned her one person will sign a document in the other personal site that person citation and it becomes this mor

we had record treasury issuance.arket in the united states is doing fine, absorbing this, isn't it? >> it is and the appetite i think reflects that reach for yield is still driving the markets. it is the technicals, and until we really see rates move to the upside, the u.s. is looking very attractive in terms of 10 year, 30 year, good demand, more attractive yield and no one is worried about inflation. with triple c, reaching for yield no matter what the fundamentals are. i have yet to hear anyone talking about the importance of cash flow. that is a market being driven by technicals, not reality. jonathan: kathleen gaffney, joel levington, and kathy jones. i want to get a market check of where bonds have been, stable until today. the 10 year treasury yield down by eight basis points. 287. a bit into the backend, on the 30 year. still ahead, the final spread and the week ahead. a big week for retail, with earnings and economic data. this is bloomberg real yield. ♪ ♪ jonathan: i am jonathan ferro. this is "bloomberg re