Archive for March, 2016

Ten Year Note Shortage

Monday, March 7th, 2016

Via Bloomberg: March 6, 2016 — 7:00 PM EST Overnight rate to borrow the security nears negative barrier Repo shortage stoked as yield's drop brings out bears Demand is so great for benchmark 10-year Treasuries in the $1.6 trillion market for borrowing and lending U.S. government debt, and supply is so short, that traders ...

Iron Ore Prices Soar in Asia

Monday, March 7th, 2016

Via Bloomberg: March 6, 2016 — 10:13 PM EST Updated on March 7, 2016 — 2:26 AM EST   Iron ore in Asia soared after Chinese policy makers signaled their willingness to buttress growth, with prices rallying even as the authorities reiterated pledges to cut excess industrial capacity, including in steel. Miners’ shares rocketed, ...

From the “Me Thinks the Lady Doth Protest Too Much” Department

Sunday, March 6th, 2016

Via the FT: China's official foreign exchange reserves only include highly liquid assets, a top central banker said on Sunday, seeking to reassure investors that authorities have enough ammunition to prevent a sharp fall in the renminbi. Investor sentiment towards China's currency has turned sharply negative since a surprise devaluation in August, ...

Larry Summers on Too Low Inflation

Sunday, March 6th, 2016

Via Larry Summers in the FT:   A world stumped by stubbornly low inflation There is no evidence that policymakers are acting strongly to restore their credibility March 3, 2016 by: Lawrence Summers Here is a thought experiment that illuminates the challenges currently facing macroeconomic policymakers in the US and the rest of the industrial world. Imagine ...

BIS Negative on Negative Rates

Sunday, March 6th, 2016

Via the FT:   Bank for International Settlements warns of negative rates risk Critics say Europe and Japan are engaging in short-sighted attempts to weaken currencies Negative interest rates risk backfiring the longer and more deeply central banks in Europe and Japan venture into this unconventional monetary policy, economists from the Bank for International ...

Growth Sans Debt Bubble in China?

Sunday, March 6th, 2016

Via the WSJ: By Mark Magnier and Lingling Wei March 6, 2016 11:37 a.m. ET BEIJING—China’s leaders made clear they are emphasizing growth over restructuring this year, but suggested they are trying to avoid inflating debt or asset bubbles as they send massive amounts of money coursing through the economy. The government’s announcement of ...

B of A Trading Revenues Slump; Job Cuts to Follow

Saturday, March 5th, 2016

Via Bloomberg: Fixed-income trading said to drop 10% from a year earlier Revenue from equity trading said to slump 11% to 12% Bank of America Corp. has generated less revenue from its equity and fixed-income trading businesses so far this year than in the same period of 2015, according to people with knowledge ...

Sell the Rally

Saturday, March 5th, 2016

Via Bloomberg: Julie Verhage julieverhage March 4, 2016 — 8:38 AM EST Despite some recovery in the world's equity markets following a turbulent start to the year, strategists at HSBC Holdings Plc are urging caution when attempting to buy a dip in stocks. "Cash is king in a world with [debt] overhangs," the team, led ...

GDP Now

Friday, March 4th, 2016

Via the Federal Reserve Bank of Atlanta: The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our new GDPNow forecasting model provides a "nowcast" of the official estimate prior to its release. Recent forecasts for ...

Weekend Data Preview

Friday, March 4th, 2016

Via Robert Sinche at Amherst Pierpont Securities: CHINA: Over the weekend the National People’s Congress is expected to release the 2016 GDP forecast, likely in the 6-7% range. China may also release Foreign Reserve data for February, with the Bberg consensus expecting a relatively small drop of “only” $40bn, to $3,190bn, ...