Bloomberg – China Ready to Buy More Treasuries as Yuan Stabilizes Nation cut holdings in 2016 as it sought to defend currency China is prepared to increase its holdings of U.S. Treasuries under the right circumstances, as officials judge the assets are becoming more attractive than other sovereign debt and as the yuan stabilizes, according to… Continue reading Does China’s Purchases of USTs Really Matter?
The Financial Times – Key US yield curve measure flattens to new eight-month low An important measure for bank profitability dropped on Tuesday to an eight-month low, pressuring lenders’ shares and highlighting the deterioration of the reflation trade. The difference in yield between 2- and 10-year Treasury notes dropped 2.5 basis points to 84.99 bps, the… Continue reading Financials Not Prepared for Further Flattening in the Yield Curve
Financial Times – Bank shares hit as Treasury yield curve flattens Net interest margins for financials been depressed for an extended period An important measure for US bank profitability plumbed an eight-month low on Tuesday, pressuring the shares of lenders and highlighting doubts in the bond market over the prospect of an acceleration in the economy… Continue reading ETF Investors Clinging to Post-Election Bank Bets
The Financial Times – Edward Luce: The market remains blind to Trumpian risk A few weeks ago, Wall Street’s high valuations made more intuitive sense. At that point — before Mr Trump’s decision to fire James Comey, the FBI director — the markets were banking on “Trumpflation”. Prospects for a tax cut stimulus still looked reasonable.… Continue reading Are The Markets Wrong About Trump?
Bloomberg Gadfly – Nir Kaissar: The Stumble of Bull Run It’s tricky to compile comparable numbers for historical periods, primarily because the composition of the S&P 500 changes over time. Roughly one-half of the index’s constituents either weren’t in the index three decades ago or their earnings numbers for those prior periods aren’t available.… Continue reading Are Stocks Too Expensive?
Bloomberg View – Europe’s Central Bank Is the World’s Most Important The ECB’s moves are influencing not only European bonds, but Treasuries, too. Fed Chair Janet Yellen, Draghi and many of their colleagues must be perplexed about what is not happening in Japan. There, despite evidence of an extraordinarily tight labor market — the ratio of… Continue reading All Eyes On The ECB
The Financial Times – Bond volatility: all aboard the big dipper? Bond volatility has remained extremely low since then. The Merrill Lynch Option Volatility Estimate index (Move), which offers a gauge of expected price swings in US debt by measuring implied volatility on one-month Treasury options, fell to 57.5 on May 31, down from a… Continue reading Bond Volatility
Bloomberg Business – Gold Makes Run Toward $1,300 as Risk Flares From U.K. to Mideast Gold’s taking aim at $1,300 an ounce. The metal has rallied to the highest since November as investors position themselves for the outcome of the U.K. election and potential drama of former FBI Director James Comey’s testimony, while also tracking tensions… Continue reading Gold Continues Its March Higher
Bloomberg Business – A $1.2 Billion Equity Quant Fund Run by QIM Is Up 55% This Year Quantitative Investment Management, the $3.5 billion money management shop run by Jaffray Woodriff, saw its tactical hedge fund return 55 percent in the first five months of the year, according to an investor document seen by Bloomberg News. The… Continue reading Finally A Quant Fund Doing Well
Bloomberg Business – Is the World Overdoing Low Interest Rates? Some economists say too-low rates can discourage banks from making loans Low interest rates are supposed to accelerate economic growth. But if central banks cut rates too much, they could actually slow the economy. So says a counterintuitive theory that’s making the rounds in academic and banking circles. “Fed… Continue reading Low Interest Rates And Bank Loans
Bloomberg Business – U.S. Sees Crude Output Breaking 48-Year-Old Record in 2018 Domestic production to top 1970 high on shale-drilling surge U.S. crude production will average more than 10 million barrels a day for the first time in 2018, breaking a record almost five decades old and keeping prices from rising as much as previously… Continue reading U.S. Crude Oil Output To Break A Record Next Year
Bloomberg View – Conor Sen: Wage Growth Is the Key to … Well, Everything Call it the new Fed conundrum. If the labor market in the U.S. is around full employment, as May’s 4.3 percent unemployment rate would indicate, why are we not seeing surges in wage growth and labor-force participation? Stronger wage growth would solve… Continue reading Why Wage Growth Is Important