The payroll number missed expectations for private sector jobs buy 140k in May and we had another 15k in missed revisions. So it was a net miss of over 150k jobs and the 10y yield has fallen from 3.33 pre-number to 3.25 post number – 8bps on a 150k miss seems a little light. Granted […]
There are 2 story links below that are worth a quick read this morning. The first is “Blackrock’s Fink Says US Stocks Ready to Rock” and the second “Covered Bond Sales Surge, Transocean Tumbles: Credit Markets”. NSN L3EOYZ1A1I4H NSN L3FLPW0YHQ0X The first article is self-explanatory; the second article quotes some senior GE investment managers who […]
It’s a calm day with not much new news so I’ll keep it short. The EURO still looks sick at just around 122, while equities trade a little better and bonds a little softer. Peripheral Europe is trading very poorly this morning with the 10yr Bund/BTP spread almost at news highs towards 160 and 10yr […]
The following is an excerpt from a letter dated April 27, 1999 to Antonio Martino, a founding member of Forza Italia, from Milton Friedman http://www.cato.org/pubs/journal/cj28n2/cj28n2-10.pdf “Your views and mine are currently very much the same on the euro. . . . What most troubles me as it does you is that members of the euro […]
First of all it’s nice to be back stateside after a long and fascinating trip to Asia. Given the issues in Korea we skipped our last stop in Seoul, thankfully, and I made it back a day early. I want to spend some time this morning on the issues that came up during our discussions […]
A few months back I wrote 2 commentaries- one entitled “Remain calm, all is well” and another one entitled “Remain calm, all is well redux”. Both of these were in response to 25bps discount rate hikes by the Federal Reserve. At that time many clients seemed convinced that the fed funds rate and IOER were […]
1. The Fed 2009 consolidated financial statements 2. Separating Derivatives businesses from commercial banking business 3. Poor initial claims data 4. EU unraveling 5. Real money woes I will get to 1, 2 and 3 tomorrow as I think 4 and 5 are the most important- Real money woes– In the past 36 hours we […]
Given the market developments over the past couple days, it feels right that I should be writing today’s commentary from Tokyo – the global center of government policy mishaps. Since I last wrote on Wednesday risk assets have sold off sharply, USTs and Euro govvies have ripped higher and the EUR has squeezed almost back […]
The ECB bought 20b USD of peripheral bonds last week – and the entire 400b USD stock of Greek debt went up 15 to 20 points – the largest return on investment for any government program in history I think! Furthermore, those returns do not include the even larger dollar value moves in Spanish, Portuguese […]
Reserve asset managers and real money are caught VERY long Euros. International corporates with receivable/payable mismatches are scrambling to hedge Euro exposures. And of course, speculative money is pushing hard to short Euros. The rest of the flows in global capital markets are just a sideshow. Given the Sunday night announcement from Brussels, European assets […]