Archive for June, 2016

Junk Bonds as a Repositiory of Relative Value

Sunday, June 19th, 2016

Via WSJ: Markets Stocks Abreast of the Market Junk Bonds Regain Fans Investors embrace U.S. high-yield market as stocks and government debt look expensive; net positive from ‘Brexit’? ENLARGE By Sam Goldfarb June 19, 2016 3:40 p.m. ET 0 COMMENTS Some investors are turning again to junk bonds, saying their higher yields make them a good bet at ...

Central Banks Prepared to Respond to Brexit Victory

Sunday, June 19th, 2016

Via Bloomberg: June 19, 2016 — 2:16 PM EDT Finally, a financial flare-up that the world’s central banks will have seen coming.   On Friday morning London time -- when the result of a U.K. referendum will show whether the nation has chosen to leave the European Union -- the Bank of Japan and ...

Weekend Preview

Sunday, June 19th, 2016

Via Robert Sinche at Amherst Pierpont Securities: CHINA: The Monthly Property Price report is expected to be released this evening; in April, 46 of 70 cities reported price increases versus the prior April. While corporate investment has been soft in China, the residential investment sector has exhibited notable improvement this year. NEW ...

Philly Fed: Look Beyond the Headline

Thursday, June 16th, 2016

Via Millan Mulraine at TDSecurities: US: The Philly Fed Headline Index is Misleading ·         The Philly Fed index surprised pleasantly to the upside, with the headline index rising to 4.7 in June from -1.8. ·         On an ISM basis, however, the index weakened to 46.0 from 47.6. ·         The details of the report were quite ...

“Long lasting…Persistent Factors”

Thursday, June 16th, 2016

In her post FOMC news conference yesterday Ms Yellen sounded as though she was channeling the secular stagnation theories of the fellow whose job she took, Larry Summers. Via Reuters: Markets | Wed Jun 15, 2016 6:54pm EDT Fed's Yellen acknowledges difficulty of escaping world's low rate grip WASHINGTON | ...

Early FX

Thursday, June 16th, 2016

Via Kit Juckes at SocGen: <http://www.sgmarkets.com/r/?id=h10bd347a,17574934,17574935&p1=136122&p2=f93d31def98c3e383b27f149b59c62a0> The FOMC left rates on hold, lowering growth forecasts and the projections in the ‘dot-plot' for Fed Funds. The BOJ also left rates on hold and the yen has rallied sharply. US equities initially reacted positively to the Fed's dovish tone but suffered a late swoon ...

FX

Thursday, June 16th, 2016

Via Marc Chandler at Brown Brothers Harriman: The US dollar is higher against the major currencies but the Japanese yen and the New Zealand dollar.  The dollar fell to new two-year lows against the yen to JPY103.55 before bouncing in the European morning back to JPY104.40.  The Kiwi was helped by ...

China Sells Stocks and Bonds

Thursday, June 16th, 2016

This Bloomberg article quotes Brad Setser of the Council on Foreign Relations. He recently worked in the Obama Administration and has resumed blogging after a seven year hiatus. I highly recommend his blog, Follow the Money. Via Bloomberg: June 15, 2016 — 7:00 PM EDT Updated on June 16, 2016 — 12:32 AM ...

BOJ Inaction

Thursday, June 16th, 2016

Maybe the BOJ was taking its cue from 17th century English poet John Milton's famous sonnet which concludes with the famous line, "They also serve who only stand and wait". Maybe the BOJ thought that its  paralyzing inertia would not move markets. They were wrong as yen surged versus the ...

No Cooperation in the Oil Patch

Thursday, June 16th, 2016

Via Bloomberg: Elena Mazneva Ryan Chilcote ryanchilcote June 16, 2016 — 5:48 AM EDT U.S shale production may start to rebound next year on prices Global period of low oil prices could last 10 to 15 years   It makes no sense now for Russia and Saudi Arabia, the world’s biggest oil suppliers, to work together to influence ...