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News & Views: Monday, August 11
What you need to know for today's trading day.
Michael Sedacca    

How Bond Traders Profit Off Americans Earning $24.45 an Hour (Bloomberg)

Kinder Morgan to Consolidate Empire (WSJ)

War Risks Slow Company Bond Sales to Least Since July '13 (Bloomberg)

Maliki digs in as U.S. pushes for new Iraq government (Reuters)

China Loosens Monetary Conditions in Test of Credit Power (Bloomberg)

Views
Stanley Fischer, the new vice chairman at the Fed, gave his second speech since being nominated for his position early this morning. His dovish rhetoric was very aligned with Janet Yellen's, citing slowdowns in productivity because of a drop in the labor force. He also highlighted how it is difficult for a central banker to determine whether the output gap (they call it "slack") in the economy is due to temporary factors - ie post recession regulation and labor displacement - or permanent factors due to the aging demographic in the US. In terms of an exit process, he alluded to the use of the reverse repo facility as a key tool in keeping a floor under money market rates.

Although many investors may be pointing to the easing of tensions in Russia, or Israel, or Iraq as the reason behind the rally, this is the true story of the morning. When it comes to Fed policy, at the moment the only opinions that "matter" are those from the dovish side - Yellen, Fischer, and Dudley. By comparison, Dallas Fed President Richard Fisher, a former market professional (who thinks he goes back to the buyside after his time at the Fed?) will be out of the FRB by the time they even start hiking, so his opinions hold less value by default.

Was that not one of the best golf tournaments you've watched in a very long time?

China inflation data over the weekend was exactly inline with expectations on the input and output side of things. Away from that, the Bloomberg article published last night (linked above) that discusses its Monetary Conditions Index is well worth the read. A front-page commnetary in the China Securities Journal, considered the mouthpiece for the PBoC, said that liquidity conditions will remain relatively loose in the second half of the year. It also said that lowering companies financing costs and preventing financial systemic risk (presumably from trust products blowing up) are the central bank's two main goals the rest of this year. Translated link.

Overnight Data:
- China CPI YoY (July) unchanged at 2.3% vs 2.3% expected
- China PPI YoY up to -0.9% vs -0.9% exp, prior -1.1%
- Japan consumer confidence index (July) up to 41.5 vs 42 exp, prior 41.1
- Japan machine tool orders (July prelim) YoY up 37.7%, prior 34.1%

US Economics (Time Zone: EST)
 
No major reports scheduled
11:30 Treasury to sell $28b 3-month bills and $25b 6-month bills

Fedspeak

3:15am Fischer (dove, vice chair) spoke in Stockholm
 
Earnings
 
Before:
Sysco (SYY)
Dean Foods (DF)
Priceline (PCLN)

After:
Nuance (NUAN)
Caesars Entertainment (CZR)

Twitter: @MichaelSedacca

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

News & Views: Monday, August 11
What you need to know for today's trading day.
Michael Sedacca    

How Bond Traders Profit Off Americans Earning $24.45 an Hour (Bloomberg)

Kinder Morgan to Consolidate Empire (WSJ)

War Risks Slow Company Bond Sales to Least Since July '13 (Bloomberg)

Maliki digs in as U.S. pushes for new Iraq government (Reuters)

China Loosens Monetary Conditions in Test of Credit Power (Bloomberg)

Views
Stanley Fischer, the new vice chairman at the Fed, gave his second speech since being nominated for his position early this morning. His dovish rhetoric was very aligned with Janet Yellen's, citing slowdowns in productivity because of a drop in the labor force. He also highlighted how it is difficult for a central banker to determine whether the output gap (they call it "slack") in the economy is due to temporary factors - ie post recession regulation and labor displacement - or permanent factors due to the aging demographic in the US. In terms of an exit process, he alluded to the use of the reverse repo facility as a key tool in keeping a floor under money market rates.

Although many investors may be pointing to the easing of tensions in Russia, or Israel, or Iraq as the reason behind the rally, this is the true story of the morning. When it comes to Fed policy, at the moment the only opinions that "matter" are those from the dovish side - Yellen, Fischer, and Dudley. By comparison, Dallas Fed President Richard Fisher, a former market professional (who thinks he goes back to the buyside after his time at the Fed?) will be out of the FRB by the time they even start hiking, so his opinions hold less value by default.

Was that not one of the best golf tournaments you've watched in a very long time?

China inflation data over the weekend was exactly inline with expectations on the input and output side of things. Away from that, the Bloomberg article published last night (linked above) that discusses its Monetary Conditions Index is well worth the read. A front-page commnetary in the China Securities Journal, considered the mouthpiece for the PBoC, said that liquidity conditions will remain relatively loose in the second half of the year. It also said that lowering companies financing costs and preventing financial systemic risk (presumably from trust products blowing up) are the central bank's two main goals the rest of this year. Translated link.

Overnight Data:
- China CPI YoY (July) unchanged at 2.3% vs 2.3% expected
- China PPI YoY up to -0.9% vs -0.9% exp, prior -1.1%
- Japan consumer confidence index (July) up to 41.5 vs 42 exp, prior 41.1
- Japan machine tool orders (July prelim) YoY up 37.7%, prior 34.1%

US Economics (Time Zone: EST)
 
No major reports scheduled
11:30 Treasury to sell $28b 3-month bills and $25b 6-month bills

Fedspeak

3:15am Fischer (dove, vice chair) spoke in Stockholm
 
Earnings
 
Before:
Sysco (SYY)
Dean Foods (DF)
Priceline (PCLN)

After:
Nuance (NUAN)
Caesars Entertainment (CZR)

Twitter: @MichaelSedacca

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

More From Michael Sedacca
Daily Recap
News & Views: Monday, August 11
What you need to know for today's trading day.
Michael Sedacca    

How Bond Traders Profit Off Americans Earning $24.45 an Hour (Bloomberg)

Kinder Morgan to Consolidate Empire (WSJ)

War Risks Slow Company Bond Sales to Least Since July '13 (Bloomberg)

Maliki digs in as U.S. pushes for new Iraq government (Reuters)

China Loosens Monetary Conditions in Test of Credit Power (Bloomberg)

Views
Stanley Fischer, the new vice chairman at the Fed, gave his second speech since being nominated for his position early this morning. His dovish rhetoric was very aligned with Janet Yellen's, citing slowdowns in productivity because of a drop in the labor force. He also highlighted how it is difficult for a central banker to determine whether the output gap (they call it "slack") in the economy is due to temporary factors - ie post recession regulation and labor displacement - or permanent factors due to the aging demographic in the US. In terms of an exit process, he alluded to the use of the reverse repo facility as a key tool in keeping a floor under money market rates.

Although many investors may be pointing to the easing of tensions in Russia, or Israel, or Iraq as the reason behind the rally, this is the true story of the morning. When it comes to Fed policy, at the moment the only opinions that "matter" are those from the dovish side - Yellen, Fischer, and Dudley. By comparison, Dallas Fed President Richard Fisher, a former market professional (who thinks he goes back to the buyside after his time at the Fed?) will be out of the FRB by the time they even start hiking, so his opinions hold less value by default.

Was that not one of the best golf tournaments you've watched in a very long time?

China inflation data over the weekend was exactly inline with expectations on the input and output side of things. Away from that, the Bloomberg article published last night (linked above) that discusses its Monetary Conditions Index is well worth the read. A front-page commnetary in the China Securities Journal, considered the mouthpiece for the PBoC, said that liquidity conditions will remain relatively loose in the second half of the year. It also said that lowering companies financing costs and preventing financial systemic risk (presumably from trust products blowing up) are the central bank's two main goals the rest of this year. Translated link.

Overnight Data:
- China CPI YoY (July) unchanged at 2.3% vs 2.3% expected
- China PPI YoY up to -0.9% vs -0.9% exp, prior -1.1%
- Japan consumer confidence index (July) up to 41.5 vs 42 exp, prior 41.1
- Japan machine tool orders (July prelim) YoY up 37.7%, prior 34.1%

US Economics (Time Zone: EST)
 
No major reports scheduled
11:30 Treasury to sell $28b 3-month bills and $25b 6-month bills

Fedspeak

3:15am Fischer (dove, vice chair) spoke in Stockholm
 
Earnings
 
Before:
Sysco (SYY)
Dean Foods (DF)
Priceline (PCLN)

After:
Nuance (NUAN)
Caesars Entertainment (CZR)

Twitter: @MichaelSedacca

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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