Archive for October, 2016

San Francisco Fed On Slow Growth as the New Normal

Tuesday, October 11th, 2016

Interesting article by John Fernald of the Research Department of the San Francisco Fed. He writes that the New Normal means real GDP growth between 1.5 and 1.75 percent. The result will be lower wages, less growth in tax revenue and a lower neutral funds rate. Here is an excerpt ...

Overnight Preview

Tuesday, October 11th, 2016

Via Robert Sinche at Amherst Pierpont Securities: CHINA: Over the next week, the Bberg consensus expects the monetary report will show continued strength in Aggregate Financing at CNY1,390bn versus a solid CNY1,469.7bn in August. The improvement would likely reflect solid loan growth as fiscal stimulus takes hold. AUSTRALIA: Reflecting stabilization of growth ...

Saudi Arabia Finances

Tuesday, October 11th, 2016

Saudi Arabia will soon visit the markets with a huge bond issue. This Bloomberg story highlights the risk inherent in that issuance ( to investors) as enumerated in the prospectus. Via Bloomberg: Four Highlights From Saudi Arabia’s 220-Page Bond Prospectus 2016-10-11 14:37:00.273 GMT By Matthew Martin and Anthony DiPaola (Bloomberg) -- As Saudi Arabia prepares ...

Slow Down Your Moving Too Fast

Tuesday, October 11th, 2016

That is what Simon and Garfunkel said in the 59th Street Bridge song. Chicago Fed President Evans essentially said the same thing last night as he noted that the lingering effects of the Great Recession remain with us and inflation remains below target. Separately, if you have never taken the tram ...

Some Corporate Bond Stuff

Tuesday, October 11th, 2016

Via Bloomberg: IG CREDIT: 5Y Issues Led Low Volume Friday Session 2016-10-11 10:25:32.849 GMT By Robert Elson (Bloomberg) -- Secondary IG trading ended with a Trace count of $11.2b Friday vs $17.3b Thursday, $15.3b the previous Friday. 10-DMA $15.8b; 10-Friday moving avg $11.5b. * 144a trading added $1.9b of IG volume Friday vs $2.2b Thursday, $2.2b last Friday * ...

FX

Tuesday, October 11th, 2016

Via Marc Chandler at Brown Brothers: Dollar Remains Bid The dollar is bid and an important driver is the backing up of US rates Japan reported a larger than expected August trade and current account figures Sterling cannot find any traction Minneapolis Fed President Kashkari is the only Fed speaker ...

Credit Pipeline

Tuesday, October 11th, 2016

Via Bloomberg: IG CREDIT PIPELINE: 2 to Price; Saudi Roadshows to Begin 2016-10-11 09:55:46.184 GMT By Robert Elson (Bloomberg) -- Expected to price today: * KEB Hana Bank (KEB) A1/A; to price $benchmark 144a/Reg-S 2- part deal, via managers C/CA/JPM/SCB/UBS * 3Y, IPT +95 area * 5Y, IPT +105 area * Sumitomo Mitsui Financial Group (SMFG) A1/A-, to price ...

Fear Morphs into Greed

Tuesday, October 11th, 2016

Via WSJ: Markets Streetwise The Great Market Switcheroo of 2016 y By James Mackintosh Updated Oct. 10, 2016 11:30 a.m. ET 4 COMMENTS Investors who got just one trade right this year would have done brilliantly: Sell everything that did well in the first half of the year and buy everything that did badly. The reversal has been ...

German ZEW Surges

Tuesday, October 11th, 2016

Via Bloomberg: German ZEW Investor Sentiment Jumps in Sign Economy Robust Piotr Skolimowski Skolimowski October 11, 2016 — 5:09 AM EDT Updated on October 11, 2016 — 5:33 AM EDT Gauge for expectations rises to 6.2 in Oct. from 0.5 in Sept. ZEW says German banks currently are burden to economic outlook   German investor confidence improved more than ...

Risks From Depreciating Yuan

Tuesday, October 11th, 2016

Via Bloomberg: Christopher Langner Oct 11, 2016 3:29 AM EDT Traditional theory says a cheaper currency should be good news for an export-dependent nation that's losing ground to lower-cost rivals. That doesn't apply in China's case, and its banks could be next to suffer the consequences. Investors have good reason to ...