Lower leverage demand and reduced financing costs indicate a shift towards lower risk appetite

From Investing.com: 2024-12-27 02:30:00

Yesterday’s market closed flat with light trading volume as expected post-Christmas. Treasury yields showed strength after strong auctions, peaking at 4.64% before closing at 4.59%. Technical formations in the 30-year yield point to potential yield curve normalization. The 10-2 yield curve held steady at 25 basis points. Equity financing costs, like BTIC rollover contracts, dropped significantly, indicating reduced leverage demand. Repo activity for equity securities also declined, aligning with lower financing costs. With fewer expected Fed rate cuts, markets may be reducing leverage levels and reassessing risk for the new year.



Read more at Investing.com: Lower Leverage Demand Raises Questions About Broader Market Risk Appetite