The Wall Street Journal – Things to Watch in the Fed’s December Minutes The Federal Reserve on Wednesday releases minutes of its Dec. 16-17 meeting, held before a fresh round of market turbulence pushed oil prices below $50 a barrel, global bond yields to fresh lows and the U.S. dollar to new highs. 1. Considerable… Continue reading The FOMC Minutes Will Be Released Today
<Click on chart for larger image> CNBC – Why US interest rates are heading lower The whole world is suddenly in love with the 10-year Treasury note, and for U.S. consumers that could mean lower rates on mortgages and other loans. Since the turn of the year, the 10-year yield has taken a stunning journey… Continue reading Interest Rates Keep Falling
Janus Capital – Bill Gross: “Ides” There comes a time, however, when zero-based, and in some cases negative yields, fail to generate sufficient economic growth. While such yields almost automatically result in higher bond prices and escalating P/E ratios, their effect on real growth diminishes or in some cases, reverses. Corporate leaders, sensing structural changes… Continue reading Bill Gross Speaks
The Financial Times – Deflation is a rising threat for markets The world is prey to the growing problem of deficient demand Why did so many market pundits fail to foresee the decline in yields across the developed world in 2014? The short answer is that they were obsessed with the potential impact of the… Continue reading Fears Of Deflation
Reuters.com – ECB considering three approaches to QE: Dutch paper The European Central Bank is considering three possible options for buying government bonds ahead of its Jan. 22 policy meeting, Dutch newspaper Het Financieele Dagblad reported on Tuesday, citing unnamed sources. As fears grow that cheaper oil will tip the euro zone into deflation, speculation… Continue reading European ECB And Inflation
The Financial Times – The dubious relationship between yields and exchange rates If people think the dollar will depreciate against the euro in the future they should sell dollars and buy euros today, which would cause the dollar to fall against the euro. Yet the dollar has been rising as the yield gap has widened.… Continue reading Yields And Exchange Rates
Factset – Despite Drop in Gas Prices, Record High Number of Consumer Companies Lower Expectations What is surprising, however, is the unusually high number of companies in the Consumer Discretionary sector issuing negative EPS guidance for Q4. While the number of companies issuing negative EPS guidance in the Information Technology sector (24) is 11% above… Continue reading Consumer Companies Say Lower Gas Prices Not Helping
Bloomberg.com – Free Money in Bond Markets Shows Global Economy Still Struggling The world’s richest nations are borrowing for free. Taken together, the average 10-year bond yield of the U.S., Japan and Germany has dropped below 1 percent for the first time ever, according to Steven Englander, global head of G-10 foreign-exchange strategy at Citigroup… Continue reading What Message Are World Markets Telling Us?
The Telegraph – Ambrose Evans-Pritchard: Greece vs Europe: who will blink first? The eurozone stands on the brink of another crisis as Athens confronts Brussels and Berlin There is a whiff of 1914 to the latest Balkan showdown. Everybody thinks everybody else is bluffing, all of them betting that a calamitous chain reaction will be… Continue reading GRexit Talk Heats Up
Bloomberg – Oilfield Writedowns Loom as Crude Slump Guts Drilling Values Tumbling crude prices will trigger a flood of oilfield writedowns starting this month after industry returns slumped to a 16-year low, calling into question half a decade of exploration. With crude prices down more than 50 percent from their 2014 peak, fields as far-flung… Continue reading Oilfield Stress
MarketWatch – Some traders are betting on $20 oil Here’s where it gets interesting: Open interest on $30 puts on the March futures contract rose to 2,127 from 34, while $30 puts on the June contract rose from 35 to 51,252. In addition, there has even been some light trading in June $20 puts, with… Continue reading A Very Bearish Crude Call