Archive for January, 2016

China Intervention

Tuesday, January 5th, 2016

As an aging baby boomer I thought this was the best line (and even oxymoronic) in the article: "the ruling Communist Party is struggling to let markets have more sway in the world’s second-largest economy" It would seem that Marx and Lenin are spinning in their graves on that one and even ...

EuroZone Inflation Underwhelms

Tuesday, January 5th, 2016

Via the FT: Oops, Europe did it again, with a (mildly) disappointing set of inflation data. Eurostat said the annual inflation rate held steady at 0.2 per cent in December, according to its first estimate. Economists had expected a rate of 0.3 per cent, but following a drab inflation reading from Germany ...

Overnight in the Treasury Market

Tuesday, January 5th, 2016

Prices of Treasury coupon securities have posted mixed results in overnight trading (measured against 500PM NY levels). The 2 year note is the laggard as its yield has increased to 1.044 from 1.040  at 500PM. The yield on the 3 year note slipped to 1.302 from 1.307. The yield on ...

Atlanta Fed GDP Now Forecast

Monday, January 4th, 2016

The latest forecast from the Atlanta Fed has Q4 GDP running at 0.7 percent. The previous forecast back on December 23 was 1.7 percent. Q2 GDP was 3.9 percent and Q3 was 2.0 percent. If for argument sake we assume the correctness on the Atlanta Fed forecast, then I would ...

Overnight Data Preview

Monday, January 4th, 2016

Via Robert Sinche at Amherst Pierpont Securities: S. KOREA: The end-December data on Foreign Reserves is the first such release for the month, and S. Korea has kept reserves stable and allowed the KRW to weaken. JAPAN: Monetary Base growth (YOY) is likely to remain close to the 32.5% gain reported for ...

Swap Spreads and Repo and Balance Sheets and Regulation

Monday, January 4th, 2016

This is an excellent piece from PIMCO on the interconnectedness of repo , dealer balance sheets and swap spreads. It is a great read if you want to understand what is happening in those markets. Via Pimco and click here for link: Since the financial crisis in 2008, global regulators have been ...

Swap Market Commentary

Monday, January 4th, 2016

This is from a market maker who requires anonymity. I have very slightly edited this note to remove references which might compromise that quest for anonymity. Via a fully paid up subscriber: 2015...Looking back the winning trade was the US dollar and the commodity price plunge (or being in the 4 stocks ...

PMI Data

Monday, January 4th, 2016

Via Millan Mulraine at TDSecurities: US:  Manufacturing Sector Takes Turn for Worse ·         The ISM manufacturing sector index slipped to 48.2 in December from 48.6, suggesting a further weakening in manufacturing sector activity. ·         The sluggish performance reflects the continued impact from the strong dollar, lower energy prices and weak global demand. ·         The ...

FX

Monday, January 4th, 2016

Via Marc Chandler at Brown Brothers Harriman: Markets in Turmoil - Drivers for the Week (and Year) Ahead   - The markets begin the New Year in turmoil from a combination of weak China data and rising Middle East tensions - Yet, the start of a new calendar year does not necessarily mean ...

Euro Area Manufacturing

Monday, January 4th, 2016

Via Bloomberg: Manufacturing in the euro area accelerated at the fastest pace in 20 months in December as rising new orders propelled output. A Purchasing Managers’ Index for the industry rose to 53.2 from 52.8 in November, exceeding a Dec. 16 estimate for an increase to 53.1, Markit Economics said on Monday. ...