Archive for December, 2014

Pump Priming in Tokyo

Saturday, December 27th, 2014

In Japan Prime Minister Abe has announced a $29 billion stimulus package which will focus on small businesses, rural areas and disaster reconstruction. This is his firs major policy initiative since voters accorded him a mandate in an election earlier this month. Via the WSJ: Japan Prime Minister Shinzo Abe Approves $29 ...

Short Term Funds See Withdrawals

Saturday, December 27th, 2014

Merrill Lynch in its daily research note reports that the recent surge in interest rates at the front end of the fixed income market has prompted record redemptions from short term high grade  funds. Via Merrill Lynch Research: Outflows from short-term high grade funds accelerated to $1.48 last week, following two $1bn ...

Low Inflation in Japan

Friday, December 26th, 2014

Via the WSJ: Japan Inflation Slows in Blow to Abe By Tatsuo Ito And Kosaku Narioka Updated Dec. 25, 2014 7:56 p.m. ET TOKYO—Japan’s inflation rate fell to its lowest level in over a year in November as the economy struggles to emerge from a recession, in a fresh setback to Prime Minister Shinzo ...

FX

Friday, December 26th, 2014

Via Brown Brothers Harriman: Boxing Day Edition Foreign Exchange: In thin trading conditions, the major currencies are little changed.  The euro is straddling the $1.22 area.  It has held above the low seen earlier this week near $1.2165.   Since the low was seen, the reaction high has been limited to the ...

Christmas Gift from the PBOC

Thursday, December 25th, 2014

Via the FT: China News China to Ease Rules to Boost Lending China’s Central Bank to Relax Calculation of Banks’ Loan-to-Deposit Ratio By Lingling Wei Updated Dec. 25, 2014 8:08 a.m. ET BEIJING—China’s central bank is allowing banks to lend more out of their deposits as the world’s second-largest economy struggles to gain momentum, according ...

Seven Year Note Auction

Wednesday, December 24th, 2014

Via CRT Capital: We are apprehensive about the prospects for this morning's 7-year supply.  The recent string of auction tails for 7s have us looking for a repeat performance today, if for no other reason than the holiday inspired low liquidity will present a challenge for drawing in bidding interest.  Combined ...

January Effect

Wednesday, December 24th, 2014

Via Boomberg; Corporate Bond Spreads Tend to Tighten in January: BI 2014-12-24 13:26:03.970 GMT By James Holloway (Bloomberg) -- January is often favorable for corporate bond markets as fund managers deploy cash from investment mandates awarded at year-end, BI senior analyst Richard Salditt writes in note. * Since 1994, high-grade credit spreads have narrowed 75% of the time by ...

What to Watch Today

Wednesday, December 24th, 2014

Via Bloomberg: WHAT TO WATCH: * (All times New York) Economic Data * 7:00am: MBA Mortgage Applications, Dec. 19 (prior -3.3%) * 8:30am: Initial Jobless Claims, Dec. 20, est. 290k (prior 289k) * Continuing Claims, Dec. 13, est. 2.375m (prior 2.373m) * Continuing Claims, Dec. 13, est. 2.375m (prior 2.373m)</li></ul> * 9:45am: Bloomberg Consumer Comfort, Dec. 21 (prior 41.7) Central ...

FX

Wednesday, December 24th, 2014

Via Brown Brothers Harriman: Foreign Exchange: The US dollar’s gains scored yesterday in the wake of a strong upward revision in Q3 GDP to 5% have been pared slightly today in extremely thin market conditions.  The euro was sold to a new 28-month low (~$1.2165) yesterday and is struggling to re-establish ...

Merry Christmas

Wednesday, December 24th, 2014

I want to wish readers a joyous Christmas and a Happy New Year. I will be spending the next several days enjoying life with my family and blogging will continue on the light side until 2015 arrives. Once again my best wishes for a blessed and happy holiday interlude. Peace. John Jansen