Archive for April, 2005
High- yield bond market troubles may herald worse to come
Hard times for high- yielding bonds may presage more rough days for the stock markets and the economy. Investors typically demand higher returns on high- yield debt ie junk bonds, to compensate for the risk that the issuers could go broke and not pay them back. But in recent years default rates have been low [...]
April 29, 2005
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eurozone debt yields slide on growth fears
Eurozone government bond yields yesterday hit all-time record lows as debt prices surged after a poor set of US data triggered fresh concerns about a slowdown in global economic growth. Durable goods orders in the US unexpectedly dropped 2.8 per cent in March – the market had been expecting a 0.3 per cent increase – [...]
April 28, 2005
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Treasuries slip as equities bounce
Rising equity markets and the forthcoming sale of new short-dated paper were enough to move US Treasury yields higher and prices lower in an otherwise quiet trading session on Monday. The US Treasury is set to sell $24bn of new two-year notes on Wednesday, which may have prompted some selling in the market by trading [...]
April 26, 2005
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FED to continue raising interest rates
The US Federal Reserve is “not yet finished” bringing up interest rates to a normal level after seven straight increases of a quarter percentage point, central bank governor Donald Kohn said on Friday. In a speech to a New York economics conference, he said the federal funds rate, now at 2.75 percent, is likely to [...]
April 25, 2005
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Japan to continue 0% interest rates
The Bank of Japan is poised to abandon its forecast of a return to inflation this fiscal year, according to Yutaka Yamaguchi, a former deputy governor.The move would delay a departure from zero interest rates until the March 2006-March 2007 financial year at the earliest. Mr Yamaguchi said at a Tokyo press conference that the [...]
April 22, 2005
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UK Gilt issues to be lowered by £2.4bn to £51.1bn.
The UK government has decided to cut it’s borrowing in the current financial year by £3.9bn after data revealed it had lower-than-anticipated net cash requirements for the year before. With increasing government receipts and restraint on public spending towards the end of 2004-5, net cash required fell by about £4bn, according to figures from the [...]
April 21, 2005
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T Bonds soar as inflation fears ease
Housing starts post a dramatic fall and the PPI index grows less- than- expected; dollar falls. Treasury prices jumped after dual government reports offered analysts some relief from inflation fears. The dollar lost ground to the euro, sterling and yen. The benchmark 10-year note climbed 19/32 of a point to 98-13/32 to yield 4.20 percent, [...]
April 20, 2005
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ECB may not raise rates this year
The European Central Bank may have to leave interest rates unchanged until the end of this year or beyond, an increasing number of economists believe, based on the recent poor economic performance of the 12-country eurozone and comments by the central bank. The ECB has already kept interest rates at 2 per cent for 22 [...]
April 18, 2005
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Warning- imbalances worsen
Warning: global economic imbalances are getting worse. The US trade deficit rose to a new record $61bn (£32bn) in February. This was not supposed to happen. Global imbalances were expected to narrow as the economic cycle matured. Instead they are increasing. The International Monetary Fund is worried that this trend will continue, increasing the risk [...]
April 15, 2005
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Inflation linked 50-year UK bond in prospect
The UK government is poised to become the first in the world to issue an inflation-linked 50-year bond to satisfy rising demand for such assets from institutional investors.The Debt Management Office which borrows on behalf of the government already plans to sell a 50-year conventional bond next month. But an ultra-long bond linked to inflation [...]
April 14, 2005
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