Archive for August, 2016

UK Pension Agonies

Tuesday, August 2nd, 2016

Excellent article  by Tracy Alloway at Bloomberg on the Brexit induced pension hole in UK. Via Bloomberg: Tracy Alloway tracyalloway August 2, 2016 — 5:18 AM EDT The pension plans of companies in the FTSE 350 have been hit by a Brexit-induced double whammy of lower corporate bond yields and weaker growth that threatens to ...

Underwhelmed

Tuesday, August 2nd, 2016

Via Bloomberg: Currency gains after Prime Minister Abe announces fiscal plan Measures show ‘policy makers aren’t beating expectations’: RBS The Japanese yen appreciated to the strongest level in three weeks against the dollar as extra spending announced by the government amounted to only a small part of a headline number flagged ...

Some Corporate Bond Stuff

Tuesday, August 2nd, 2016

Via Bloomberg: IG CREDIT: Volume Falls; Short Maturities Led Trading 2016-08-02 09:51:14.903 GMT By Robert Elson (Bloomberg) -- Secondary IG trading ended with a Trace count of $13b vs $13.9b Friday, $14.7b the previous Monday. 10- DMA $15.7b; 10-Monday moving avg $13.1b. * 144a trading added $1.4b of IG volume vs $2.1b on Friday, $1.7b last Monday * 3 ...

Defaults in China

Monday, August 1st, 2016

I am a little long some Treasuries and short some S and P so lets hope they default sooner rather than later! Via Bloomberg: Wuhan Guoyu sees uncertainty in repaying bonds due this week The industry’s sluggishness weakens its financial strength A Chinese shipbuilder said it may not be able to repay ...

Long Bond at Zero Yield?

Monday, August 1st, 2016

Bloomberg reports that analysts at Nomura expect that a search for yield by japanese investors will drive US Long Bond yields to zero in two years. So this is your last chance to climb on board that train before it rumbles out of the station. Via Bloomberg: Highest Treasury Yield to Evaporate ...

T Bill Dearth

Monday, August 1st, 2016

Via Bloomberg: Liz McCormick mccormickliz July 31, 2016 — 7:00 PM EDT The U.S. government’s attempt to alleviate the short supply of T-bills is about to get a little harder. After years in the making, a post-crisis rule to prevent a run on the money-market industry will finally take effect this October. It will force ...

Financial Repression

Monday, August 1st, 2016

Via the WSJ: By James Mackintosh Updated Aug. 1, 2016 5:08 p.m. ET 9 COMMENTS The money markets are screaming about a global shortage of dollars. Financial stress indicators are flashing yellow. The Bank of Japan on Friday took special measures to help its banks access greenbacks, and interbank borrowing rates for dollars are ...

Secular Stagnation Lives

Monday, August 1st, 2016

Via Bloomberg: Sid Verma @_sidverma August 1, 2016 — 6:05 AM EDT You can now add the rates strategy team at Deutsche Bank AG to the growing list of Wall Street analysts who reckon the U.S. economy is probably ensnared in secular stagnation. In a research note published on Friday, Deutsche Bank strategists, led by ...

FX

Monday, August 1st, 2016

Via Marc Chandler at Brown Brothers Harriman: Drivers for the Week Ahead The Reserve of Bank of Australia meets Investors are more confident of the outcome of the Bank of England's meeting than the RBA meeting Japan's Prime Minister Abe seemingly hurriedly confirmed some details of his fiscal plan. The US ...

Repo Market Jitters

Monday, August 1st, 2016

Via WSJ: By Katy Burne Updated July 31, 2016 4:41 p.m. ET 7 COMMENTS J.P. Morgan Chase & Co.’s retreat from a mundane but crucial settlement role in the $13 trillion U.S. Treasury market poses a fresh challenge for regulators seeking to bolster the market’s capacity to withstand shocks. The New York bank’s decision, announced ...