That’s Citi’s risk-warning signals beginning to spike over the past couple of weeks and especially over the last day or two. From Citi’s Steven Englander: Read more
Click to enlarge — details (finally) of the sovereign bonds held by the European Central Bank’s inactive Securities Markets Programme, released on Thursday: Read more
We tried to explain the QE surplus ‘raid’ before but never approached the crystal clear clarity of Thursday’s ONS release on the treatment of cash transfers from the BoE to the Treasury (the release of which accompanies the news that public finances improved in January although they were flattered by such transfers): Read more
Live markets commentary from FT.com
Fed doubtful on open-ended QE3 policy || January public finances in surplus after tax receipts || US moves to fight corporate cybercrime || China and economy to direct Abe US talks || Google to debut Chrome for touchscreens || 800,000 Pentagon staff face unpaid leave || Russia’s missing billions revealed || Markets: Growth-focused asset prices are stumbling on Thursday morning Read more
Western markets were all a-jitter on Thursday. Obviously we can blame the Fed. Bickering between central bankers just doesn’t look good, whether they are American, British or continental Europeans.
An immediate question is raised: are we witnessing the end of ‘fast and loose’ policy? The quick answer is probably ‘not yet,’ although yes, it will end, and maybe sooner than some had come to assume. This presents a fresh challenge for policy markets, as noted by Lloyds’ Charles Diebel: Read more
Nymex WTI futures trade experienced somewhat of a wobble on Wednesday.
As Stephen Schork highlights in his chart of the day: Read more
Elsewhere on Thursday,
- A gift of the gab?
- Banks on borrowed money.
- Russia’s “well organised” capital flight. Read more
Asian markets fall after FOMC minutes || China talks of more property curbs || US Congress to target Target2 Iran-linked transfers || RSA investors unhappy at dividend cut || FSA’s Libor report coming soonish || Foxconn hiring freeze hurts Apple shares || Questions after Sony PS4 announcement || Fed wants to expand beyond primary dealers Read more
ROUND-UP
FT markets round-up: “Disappointing US housing data and weaker-than-expected results from the largest luxury homebuilder drove down stocks in the sector while broader markets sold off after the release of the FOMC minutes. Main indices fell sharply giving up some of the recent gains after reaching fresh multiyear highs during the previous session. The minutes from the FOMC meeting revealed that “many” officials were concerned about the costs and risks of further asset purchases, as the Fed buys securities at a pace of $85bn a month. Markets which started the day lower, sold off after the release of the minutes with the benchmark S&P 500 index closing down 1.2 per cent at 1,511.95.” (Financial Times) Read more
Here’s the passage from the January FOMC minutes that is getting the most attention (emphasis ours, and we separated it into multiple pars for an easier read):
Several participants emphasized that the Committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved. For example, one participant argued that purchases should vary incrementally from meeting to meeting in response to incoming information about the economy. Read more
Ay ay ay! Gold is approaching a death cross and all sorts of other commodities are looking nasty too.
From a terrific post by Andy Harless:
Machismo is a type of commitment mechanism. Read more
Eurobank recently lowered the over-collateralisation (OC) of its second covered bond programme to the bare minimum allowed by Greece’s covered bond law. Avid covered bond-watchers (there must be a handful of you out there) will know of course, that specially designed legal frameworks are one of the big perks of the covered bond structure – along with juicy benefits like an overstuffing of assets and the dual recourse nature of the centuries-old debt instruments. Read more
Cheery chap, Tim Morgan, chief economist at money broker Tullett Prebon. Here’s a few charts to warm us all up on a cold February day…
Live markets commentary from FT.com
Kloppers to be replaced by inside geologist || €3.5bn buyout plan for France’s Elior || Italy’s centre-left woos Monti || Bulgaria’s government resigns || Dell shareholders maintain criticism of buyout after earnings fall || Isle of Man tax haven horizon || China FDI falls again || JGB dog that didn’t bark || Markets Read more
Here’s the dovish BoE minutes that started sterling sliding (click through for the pdf): Read more
Don’t go messing with the kiwi! The governor of New Zealand’s central bank, Graeme Wheeler, was pretty clear in a speech earlier today:
We believe the exchange rate is significantly over-valued relative to what would be sustainable long term in the absence of sizeable increases in the terms of trade and productivity. Read more
The weaker yen hasn’t done much for Japan’s exports so far, with preliminary data out today showing another record in Japan’s trade deficit. Exports were 6.4 per cent higher, year-on-year, in January and failed to raise as much as imports (up 7.3 per cent). This brought the trade deficit to Y1.63bn.
Societe Generale say not to worry yet, however. Firstly, those figures are not seasonally-adjusted. Month-on-month seasonally-adjusted numbers show the trade deficit shrank from Y678.9bn in January from a revised Y783.8bn in December. Read more
Elsewhere on Wednesday,
- Dematerialising gold.
- And yes, gold miners still suck.
- Ageing and productivity. Read more
Asian markets rise || Kloppers to be replaced by inside geologist || €3.5bn buyout plan for France’s Elior || Italy’s centre-left woos Monti || Dell shareholders maintain criticism of buyout after earnings fall || Isle of Man tax haven horizon || China FDI falls again || JGB dog that didn’t bark Read more
ROUND-UP
FT markets round-up: “A stronger-than-expected reading of German economic sentiment helped boost demand for global assets, pushing stocks on Wall Street to a fresh five-year high. News that the Zew survey covering Europe’s biggest economy rose from 35 in January to 48.2 this month helped counteract some of the recent poor data from the continent. That supported many stock barometers as they pushed back towards cyclical highs. The FTSE Eurofirst 300 closed 1.1 per cent higher. Every sub-sector gained ground apart from mobile telecoms, which was dragged down by Vodafone after the heavyweight was downgraded by a broker. On Wall Street, the S&P 500 returned to the trading fold after Monday’s Presidents’ Day holiday and added 10 points to 1,530, shrugging off easing housebuilder confidence in February and feeding off more merger talk that left the index on at a fresh 5-year high by closing time. The tech-heavy Nasdaq also rose to close to its highest level since November 2000.” (Financial Times) Read more
Love him or loathe him, Robert Skidelsky’s prose always makes for a good read.
His latest offering comes by way of Project Syndicate and relates to the issue of robots and the rise of automation. To what degree are we really approaching a leisure society and how best to respond to the changes afoot? Read more
So, you’re wondering what kind of crisis Cyprus is. And you’ve watched the success of Nicos Anastasiades in the presidential elections so far. Anastasiades is not the kind of guy to demonise creditors for the sake of it, but he will have tough negotiations ahead of him of he wins. Read more
The European parliament’s environment committee voted in favour of a plan to allow “backloading” of carbon permits. It’s the somewhat significant vote that follows the less significant vote by another committee in January, which helped prompt a big crash in carbon markets at the time.
It’s curious that in this little corner of EU co-ordination, a little good news doesn’t even provide a brief rally; prices fell more than 20 per cent after news of the vote. Read more
Live markets commentary from FT.com
Cyprus almost over first hurdle || Banks in the US can still become bigger to fail || BP squares up to US government in court over Deepwater || EU sets up working group on debt redemption || China tightens controls on housing loans || Google vs European privacy regulators || And Google to open stores? || Obamacare concerns || Potential OfficeMax & Office Depot tie-up || The Giving Pledge expands Read more
Older entries
1The real rate of British inflation
2A Minutes worth of sterling freefall [updated]
3Skidelsky on robots and more leisure
4When choked gold responds to hedging demand (and Soros)
5Further reading
Show more6From bubbles to wobbles
7Rational nerdiness vs macho bada$$ery in monetary policy
8Unstable commodities
9Tax avoidance: it's close to home
10EU carbon market gets a reprieve
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