Archive for August, 2014

Supply Considerations

Monday, August 25th, 2014

CRT Capital notes that the amount of new cash to be raised at this week's auction is the lowest since the reintroduction of the 7 year note in 2009. The logic is that there will be a plethora of reinvestment demand as that which rolls over seeks safe sanctuary. I ...

Monday, August 25th, 2014

I noted earlier the significant decline in European rates. This is a Bloomberg story with a comprehensive recap. Via Bloomberg: Europe Government Bonds Surge as Draghi Signals ECB Closer to QE 2014-08-25 09:59:08.543 GMT By Lukanyo Mnyanda Aug. 25 (Bloomberg) -- European government bonds surged, pushing yields from Germany to Spain down to records, after European Central ...

FX

Monday, August 25th, 2014

Via Marc Chandler at Brown Brothers Harriman: Drivers for the Week Ahead - We focus on three drivers for the week ahead:  the initial conditions of the markets, the data and geopolitics - The ECB will also launch the TLTRO facility - The biggest development of the day was that the French government collapsed Price ...

Reshuffling the Deck in France

Monday, August 25th, 2014

Via the FT:   François Hollande launches new reshuffle in response to leftwing revolt By Hugh Carnegy in ParisAuthor alerts French President François Hollande has launched the second reshuffle of his beleaguered Socialist government within six months following an internal revolt by leftwingers led by Arnaud Montebourg, the economy minister. He ordered Manuel Valls, the ...

August 25 2014 Opening

Monday, August 25th, 2014

Prices of Treasury coupon securities have posted bifurcated results in an extremely abbreviated trading session. There were computer glitches which restricted futures trading and London is closed for a holiday. It is 555AM in New York and cash trading will resume at 600 AM New York time. I have cash ...

Statement Change

Sunday, August 24th, 2014

This article from Reuters describes a debate at the Fed regarding the timing of a change in the language of the post meeting statement. The FOMC has previously promised to keep rates at zero for " a considerable period of time" following the end of QE which will slip into ...

Hilsenrath Article on Yellen Speech

Sunday, August 24th, 2014

Jon Hilsenrath and Pedro Nicolaci da Costa recapitulate the Yellen speech and other topics from the Jackson Hole weekend. The article breaks no new ground but is an accurate summary of the issues the FOMC confronts as it positions itself and markets for an eventual round of rate hikes. Via the ...

Another Middle East Flash Point

Sunday, August 24th, 2014

Libya was one of the first flashpoints in the Middle East in the so called Arab spring several years ago. It has not received much press but the fighting continues. The appended FT story reports on the capture of the airport in Tripoli by an Islamist militant group. Via the FT:   Libyan ...

Bank of England Paints Dickensian Picture for Labor

Sunday, August 24th, 2014

Bank of England Deputy Governor Ben Broadbent painted a dour portrait of the labor market and suggested that wage growth has permanently shifted downwards. Via the UK Telegraph: Bank of England's Deputy Governor: Low Pay Growth Here to Stay 2014-08-23 16:42:12.318 GMT Peter Spence Aug. 23 (Telegraph) -- Earnings growth has failed to beat inflation over ...

Lockhart on Rate Hikes

Sunday, August 24th, 2014

Atlanta Fed President (Spider?) Lockhart commented on Saturday that rate hikes are likely sometime in Q1 or Q2 of next year. He also said that with rate hikes drawing closer the language of the statement should be on the table in the next few meanings. A change in the language ...