News Breaks |
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| January 2, 2013 |
| 14:45 EDT |  | | Moody's: 'Cliff' deal not basis for meaningful improvement in U.S. debt ratios
Moody's Investors Service said that the fiscal package passed by both houses of Congress yesterday is a further step in clarifying the medium-term deficit and debt trajectory of the federal government. It does not, however, provide a basis for a meaningful improvement in the government's debt ratios over the medium term. The rating agency expects that further fiscal measures are likely to be taken in coming months that would result in lower future budget deficits, which are necessary if the negative outlook on the government's bond rating is to be returned to stable. On the other hand, lack of further deficit reduction measures could affect the rating negatively. Notably, yesterday's package does not address the federal government's statutory debt limit, which was reached on December 31. The need to raise the debt limit may affect the outcome of future budget negotiations. Moody's said the macroeconomic effects of the package are positive, since it averts the recession that would likely have occurred had personal income taxes gone up for all income levels. However, the increase in the Social Security payroll tax from 4.2% to 6.2% of income that became effective on January 1 will likely be a constraint on growth in coming quarters. Furthermore, expenditure cuts that may be decided in coming months could also affect the rate of GDP growth in the near term. Overall, therefore, the recent package mitigates part of the fiscal drag on the economy associated with the fiscal cliff but does not eliminate it. Moody's added that it believes that the debt limit will eventually be raised and that the risk of default on Treasury bonds is extremely low, this confluence of events adds uncertainty to the outcome of negotiations. However, the spending measures that result from the negotiations will form part of the medium-term outlook for the budget deficit. Moody's will need to consider these measures in assessing the rating outlook. Further revenue measures may also form part of the negotiations. The debt trajectory resulting from this process is likely to determine whether the Aaa rating is returned to a stable outlook or downgraded to Aa1, as Moody's previously stated. |
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| June 19, 2013 |
| 01:10 EDT | | | Asian stocks were mixed
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| June 18, 2013 |
| 20:10 EDT | | | Japan's exports rose 10.1 y/y in May
Japan's exports rose 10.1 y/y in May after a 3.8% rise in April. Analysts've now seen export increases in three consecutive months. Imports rose 10.0% from a year earlier after a 9.5% y/y increase (was 9.4%) in April. Exports to China rose 8.3% y/y while exports to the U.S. rose 16.3% y/y. The trade balance widened to a 993.9 B yen deficit in May from the 881.9 B yen deficit in April to mark the eleventh consecutive monthly deficit |
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| 16:28 EDT | | | May Factory Orders to be released at 10:00
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| 16:28 EDT | | | Week of 6/29 Redbook to be released at 08:55
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| 15:20 EDT | | | Treasury Closing Summary:
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| 14:40 EDT | | | Canada Wholesale Preview
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| 14:05 EDT | | | U.S. corporate bond update: the new issue market is relatively active today
U.S. corporate bond update: the new issue market is relatively active today ahead of tomorrow's FOMC, but there hasn't been much fallout in the Treasury market. Note that Korea Development Bank filed for a $3 B mixed securities offering. Mylan is selling $1.15 B in 3- and 5-year notes; a floating rate portion was canceled. Boston Properties upped its initial $500 M 10-year offering to $700 M. Agilent Technologies has a $600 M 10-year. Gerogia Pacific has a benchmark 10-year on tap. |
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| 13:48 EDT | | | Market higher as FOMC meeting begins
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| 13:40 EDT | | | FOMC has started its meeting
FOMC has started its meeting and will announce its decision tomorrow at 2:00 ET. The markets remain on pins and needles over what will happen to QE, case in point yesterday's volatility amid contradictory media reports (analysts continue to argue, and the FT's Harding also stated, journalists have no inside information, so comments should be taken with a grain of salt). Analysts don't look for any explicit signals on the timing of a pull back in asset purchases, though analysts do think the time is approaching. As all policymakers have indcated, the future course of QE is data dependent. So far analysts don't believe the economic reports have been sufficiently strong to give the dovish "Bernanke block" the confidence needed to start trimming QE yet. Probably of most importance with Wednesday's FOMC actions will be the new forecasts for this year and next, which will provide background on the Fed's outlooks. Analysts suspect the Fed could shave its forecasts on growth and prices for this year, which could suggest QE trimming could be a little farther off than anticipated, though analysts note the September 17, 18 FOMC could be the start, provided data don't disappoint. |
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| 13:17 EDT | | | Week of 6/29 ICSC-Goldman Store Sales to be released at 07:45
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| 13:10 EDT | | | FOMC Forecast revisions
FOMC Forecast revisions from the June FOMC meeting will be released Wednesday (and later in the July 10 FOMC minutes). Analysts expect a lowering of the Fed's near-term GDP and inflation forecasts, with a possible additional downward bump in jobless rate estimates. The mix should give a pessimistic spin to the growth and inflation estimates, and and consequently support expectations that imminent tapering is unlikely. For 2013, the GDP central tendency of 2.3%-2.8% could be lowered by 0.1% to more symmetrically bracket the 2.4% real Q4/Q4 GDP gain that analysts and many others assume, just as the PCE chain price central tendency of 1.3%-1.7% could be trimmed toward our 1.5% estimate. The 1.5%-1.6% PCE core central tendency hugs our 1.5% forecast. The 7.3%-7.5% jobless rate central tendency sits below the last 7.6% figure and brackets our 7.4% Q4 forecast. High-end estimates for 2014 and 2015 for GDP and inflation might also be trimmed. For a table of our assumptions for the Fed's revised forecasts, see our policy outlook page. |
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| 12:32 EDT | | | Fitch affirms Switzerland at 'AAA', outlook stable
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| 11:50 EDT | | | Treasury's $30 B 4-week bill auction was routine
Treasury's $30 B 4-week bill auction was routine. The bill was awarded at 0.045%, right on the screws at the bid deadline and a little cheaper than last week's 0.04% stop. There were $137.9 B in bids for a 4.61 cover, in line wiht last week's 4.63 and close to the 4.57 average. Indirect bidders took 17.5% versus last week's 24.7% and a 23.9% average. |
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| 11:45 EDT | | | Another Tweet from PIMCO's Gross:
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| 11:38 EDT |  | | BMO Capital's specialty pharma analyst holds an analyst/industry conference call
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| 11:30 EDT | | | U.S. equities are extending gains
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| 11:15 EDT | | | NY Fed bought $1.464 B in bonds
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| 11:05 EDT | | | FX Action: USD-JPY is consolidating earlier gains
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| 10:25 EDT | | | NY Fed outright purchase: the Fed is buying $1.25 B to $1.75 B in bonds
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| 10:23 EDT |  | | Gain in Chinese home prices adds to dilemma on credit, Bloomberg says
Chinese property values increased in major cities at the fastest pace in more than two years despite tougher government curbs, making it more difficult for the country to ease credit amidst a weakening economy, says Bloomberg. Reference Link |
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