Archive for September, 2016

Independent Central Banks and the Low Inflation Problem

Sunday, September 11th, 2016

Via WSJ: By Tom Fairless Updated Sept. 11, 2016 1:07 p.m. ET 3 COMMENTS FRANKFURT—In their battle against high inflation, governments granted significant independence to central banks over recent decades. Now, some economists argue that same independence could be hampering their ability to combat the current era’s problem: inflation that’s too low. To safeguard their independence, ...

Don’t Fade Lower for Longer In Long End

Sunday, September 11th, 2016

Via David Ader in Barron's: Economic Beat Why Long Rates Will Stay Subdued The Fed’s insistence on higher rates despite weak growth suggests it wants to curb enthusiasm for risk. By David Ader September 10, 2016 If the most recent employment report wasn’t disappointing enough for economic optimists, the downward revision in second-quarter output and the third ...

Expensive Junk

Saturday, September 10th, 2016

Via Barrron's: By Amey Stone September 10, 2016     “Frothy” is a good word to describe last week’s high-yield market. The seven-month return for the sector reached 20%—remarkably high for bonds. Average yields, which move in the opposite direction of prices, fell to just 6%, down from 10% in February. Companies rated below investment ...

Credit Pipeline

Friday, September 9th, 2016

Via Bloomberg: IG CREDIT PIPELINE: ASIA TAP to Price; Shire Details Emerge 2016-09-09 09:52:28.495 GMT By Robert Elson (Bloomberg) -- Expected to price today: * Asian Development Bank (ASIA) Aaa/AAA, to re-open $500m 6/16/2021 Global MTN FRN, via managers DB/JPM; IPT 3ML +19 area LATEST UPDATES * Shire (SHPLN) Baa3/BBB-, plans 5-part bond offering to partially fund Baxalta deal * Investor ...

Reining in the Banks

Friday, September 9th, 2016

Via WSJ: By Ryan Tracy and Liz Hoffman Updated Sept. 8, 2016 7:20 p.m. ET 9 COMMENTS Two U.S. financial regulators pressed for new limits on banks’ involvement in commodities and other businesses outside traditional lending, a move that could hit Goldman Sachs Group Inc. and some of its large peers. The moves on Thursday amounted ...

Gundlach Thinks Rates Have Bottomed and Ten Year Will Trade Above Two Percent in 2016

Friday, September 9th, 2016

Via Bloomberg: Should Markets Brace for Rising Rates Imminently? DoubleLine Capital Chief Investment Officer Jeffrey Gundlach said it’s time for fixed-income investors to prepare for rising interest rates and higher inflation by reducing the duration of their positions, moving money into cash and protecting against volatility. “This is a big, big moment,” Gundlach ...

Central Bankers Nudge Banks

Friday, September 9th, 2016

Via Bloomberg: ECB's Draghi Refrains From Adding Stimulus for Now ECB president says low rates not a reason for all problems Carney said yesterday he expects last rate cut to be passed on   Europe’s most powerful central banker has a message for financial institutions: Stop complaining and play your part in the recovery. “Low interest ...

Brainard Speech

Thursday, September 8th, 2016

This Barron's article suggests that one of the reasons for the bond market debacle today was the announcement the Fed Governor Brainard would deliver a speech on Monday. Monday is the last day that FOMC members may speak before the blackout period which precedes the meeting. The suggestion is that ...

Elections and Recessions

Thursday, September 8th, 2016

The current recovery is more than seven years old and is getting long in the tooth. The WSJ has posted an interesting (to me ) article on the propensity of elections to fall around election times. Via the WSJ: By Josh Zumbrun Sep 8, 2016 10:07 am ET By many key measures, the ...

FX

Thursday, September 8th, 2016

Via Marc Chandler at Brown Brothers Harriman: Dollar Soft Ahead of ECB Decision The ECB meeting is the highlight for today During the North American session, the US reports weekly jobless claims and July consumer credit Japan reported final Q2 GDP data overnight; China and Australia reported trade data Mexico ...