Archive for July, 2015

Oil Prices to Remain Depressed

Saturday, July 18th, 2015

Via the FT:   On Wall Street July 17, 2015 8:58 am Futures markets have much to say about oil’s direction   For a brief, brave moment this year there was a sense the worst was over for the oil sector. This week, that feeling evaporated. Iran’s agreement to curtail its nuclear programme, potentially restoring its place ...

Eclectic Stuff

Wednesday, July 15th, 2015

Via Merrill Lynch Research; Accelerating M&A. Celgene's equity market capitalization rose $6.8bn following the announcement last night that the company has agreed to acquire Receptos for $7.2bn in cash. At the intra-day high the increase in market cap was $10.4bn. It appears that the equity market perceives that the transaction creates ...

Overnight Data Preview

Wednesday, July 15th, 2015

Via Robert Sinche at Amherst Pierpont Securities: AUSTRALIA: The RBA is likely to focus on the Melbourne Institute survey of Consumer Inflation Expectations, which slipped back to 3.0% in June, near the record low of 2.8% reached in September 2013; the average since 1995 is 4.5%. NEW ZEALAND: The BBerg consensus expects ...

Morning Miscellany

Wednesday, July 15th, 2015

I have not heard of excessive client flow today.  Two dealers with whom I speak noted scattered buying from end users in the 7 year to 10 year bucket. One dealer offered the observation that positions have been reduced in front of the Greek imbroglio and consequently large investors did not ...

Wednesday Morning Data Drop Analysis

Wednesday, July 15th, 2015

Via Stephen Stanley at Amherst Pierpont Securities: The June PPI was firmer than expected, as the headline figure rose by 0.4% while the core component increased by 0.3%.  Food prices advanced by 0.6%, suggesting that the softness there is fading.  Egg prices shot up due to avian flu, but more importantly, ...

Today’s (Light) New Issue Calendar

Wednesday, July 15th, 2015

Via Bloomberg: BFW 07/08 14:01 IG CREDIT: List of New Issues Expected to Price in U.S. Today IG CREDIT: List of New Issues Expected to Price in U.S. Today 2015-07-15 14:02:48.281 GMT By Allan Lopez (Bloomberg) -- 2 new issues expected to price today: * Wells Fargo $benchmark A2/A+ (sr holdco); A3/A (sub holdco) * 5Y fxd ...

Yellen Testimony

Wednesday, July 15th, 2015

Via Stephen Stanley at Amherst Pierpont Securities: Chair Yellen’s testimony was basically a more concise version of her speech from last Friday.  She laid out an upbeat scenario for the economy, stated that inflation should begin to move back toward 2% soon, and reiterated that if the economy plays out as ...

FOMC on Liquidity

Wednesday, July 15th, 2015

Thanks to Steve Liddy for this Bloomberg Story: Fed Doesn’t See Bond Liquidity Problems, Calls Risks Moderate 2015-07-15 12:30:23.760 GMT By Matthew Boesler and Craig Torres (Bloomberg) -- The Federal Reserve does not see signs of liquidity problems in U.S. bond markets, despite warnings from investors to the contrary. “While market commentary increasingly pointed to a possible deterioration ...

Hilsenrath Article

Wednesday, July 15th, 2015

Via Jon Hilsenrath at the WSJ: In a speech in Cleveland last week, Federal Reserve Chairwoman Janet Yellen pointed hopefully to an upturn on retail and motor vehicle sales early in the second quarter as a sign that consumer spending might be picking up. Well that was nice while it lasted.   On Tuesday ...

Quote of the Day

Wednesday, July 15th, 2015

"The Macaulay Duration of any cash flow becomes larger as interest rates fall. One might be tempted to conclude from this observation that very low interest rate environments can be very treacherous. When rates can only go up, and when the price sensitivity of any given cash flow is near ...