Greek bonds remain unloved, except by Norway

• Strong performance by commodity currencies
• Euro still wavering
• China/US fx tensions likely to intensify again
• China/Japan bond tensions emerge
• German growth now tapering off
• BOC raises Canadian bank rate by 25bp to 1.00%
• Beige Book noted ‘widespread deceleration’

More grief for Europe’s peripheral bond markets on Wednesday, specifically Greece, with the  Greek/German 10yr government bond spread widening a further 15bp to 957bp (just below the peak back in May of 965bp). Interestingly, Norway’s enormous $450bn Government Pension Fund has been buying up Greek debt, as well as Spain, Italy and Portugal – clearly, they are of the view that none of these countries will default. Also, the FT has run a story this morning suggesting that the ECB has bought between €100m and €300m of Greek, Irish and Portuguese bonds this week as it recommences its Securities Markets Programme. Portugal held a successful 11yr auction which attracted a bid/cover of 2.6 times. Also, the Irish Finance Ministry announced that Anglo Irish, that enormous albatross around the neck of the Irish government and taxpayer, will be split up into a good bank and a bad bank...Read More

New month with old concerns

• Market moving on old stories
• Australia has new PM Gillard but the aussie is not celebrating
• No surprise with RBA or BoJ decisions
• Sterling watching gilt market for directional clues
• UK retail sales survey suggests modest August growth

The main stories in the early part of the week appear to be old ones that have been dusted off, slightly refreshed and sent out once again. The euro’s weakness overnight is owing to reports that the EU bank stress tests did not reveal all of the government debt they are holding (Wall Street Journal).  This follows on from reports yesterday that German banks may require more capital.  Furthermore, the BIS report of yesterday reminded us that the private sector deleveraging has a long way to go, with implications for both growth and currencies.  The main thing is to determine what is old news, what is speculation and what is a change of circumstances, although the trouble is that markets can move on all three, to varying degrees)...Read More

The 'even more jobless' US recovery

• Whatever comes of the US jobs data, it should not change the perception of a very jobless recovery
• Aussie weaker overnight on commodity price outlook
• More Japanese officials wary of unilateral intervention
• Trichet stretches further the definition of temporary
• More signs of switching into equities

Whatever the outcome of the US employment report today, it’s not going to change the wider perception that the pace of hiring in the US is way off that which typifies a normal recovery. On the current pace of private sector hiring, it would take nearly 7 years for employment to reach the peak seen in late 2007.  Compare this to the ‘jobless recovery’ after the last recession and in terms of reaching pre-recession peaks of employment, the pace of hiring this time around is less than half that of 8 years ago. So, whilst markets will have their usual flurry around the numbers, it’s this wider point that needs to be remembered in terms of the implication for interest rates (staying low), bonds (remaining bid, bar early September asset allocation shifts) and FX (risk of more QE)...Read More

New Month, New Flows

• BIS report shows increase in spot FX trading, dominated by investor and central-bank flows
• Fed minutes show some healthy debate
• China PMI rises modestly but below 5-year average
• Australian GDP gives the Aussie a boost
• US consumer confidence

The first trading day of September should be an indicative one for forex market sentiment, given that Tuesday was largely dominated by month-end flows in fairly light trading. This point is worth considering in light of the triennial BIS survey on the global forex markets released overnight, where there are two relevant observations.  Firstly, within the reported 20% increase in fx volumes over the past 3 years, most of this has come from spot (48%).  Secondly, in terms of investor type, most of this increase has come from “other financial institutions”, which include non-reporting banks, mutual funds, hedge funds and central banks among others.  This underlines the impact such flows can have on spot fx.  As such, a new month means new cash to be put to work and a new performance period for hedge funds...Read More

Bank of Japan, a fail

• Another Japan policy-response fails to hit the target
• European confidence improves, but at a slower pace
• UK consumer confidence reverses July decline
• Australian data suggests renewed buoyancy
• European issuance taken comfortable so far this week
• US income and spending data broadly in line

The market’s verdict on the Bank of Japan’s decision was pretty clear, with the yen substantially outperforming G10 currencies and being the only currency to strengthen vs. the USD on Monday.  Furthermore, the Nikkei is down 3.5%, with exporters particularly hit on the fear that yen-strength is here to stay.  One of the lessons from Japan over the previous 20 years, and there are many, is that policies, be they monetary or fiscal, rarely have the intended consequence.  We saw that with attempts to recapitalise the banking system in an attempt to get it lending again.  The focus now turns to the government’s fiscal package which is due to be announced at the end of next week.  Fiscal policy also has a pretty chequered history in Japan, most notably with the late ‘90s consumption tax-hike which de-railed the fragile recovery.  For now, markets are not prepared to give the government the benefit of the doubt...Read More

The UK consumer is doing very nicely

• Growth concerns gnaw away at the dollar
• Kan ratchets up the pressure on the BOJ over the economy and the yen
• CHF: the preferred safe haven currency
• UK retailers continue to report very strong sales
• German consumer confidence jumps in August
• Italian consumer confidence falls to a one year low
• Bernanke speaks on the economy at 14:00 GMT

Amidst the doom and gloom being expressed about the UK’s economic prospects, the latest survey by the CBI showed that UK retailers continue to report very decent sales. The net balance for the volume of sales in August was well above expectations at +35, a three year high, from +33 in the previous month. Retail orders were the highest since 1994, while clothing sales were the highest since 1988! According to the survey, retailers expect sales to remain strong in the months ahead. Wholesalers likewise are more optimistic than they have been for some time, but motor traders are less hopeful. Interestingly, retailers are reporting higher prices as well – the CBI’s measure of average selling prices rose to +58 in the three months to August (an 18yr high) from +49 in the period to May. Looking forward, there are some uncertainties for retailers, including the VAT hike next year, the sluggish pace of real income growth, concerns over falling house prices and the impact of savage public spending cuts. Where is this growth coming from? A couple of potential explanations – firstly, staycations have been much more common this summer, so UK consumers are spending more at home than usual, and secondly foreigners visiting the UK on holiday (and taking advantage of the cheap pound) have also been higher than usual...Read More

Retail sales in the euro area remained unchanged in June

The volume of retail trade in the euro area remained unchanged in June because of falling sales of food and beverages.

Published data show a decline in consumer spending, which could adversely affect the economic recovery.

Compared with the same period last year, retail sales in the euro area rose by 0.4%, surpassing expectations.

Economists forecast a rise of retail sales at 0.1% in June and 0,1% in annual terms.

Some States have slowed economy

THE ECONOMY CONTINUED TO GROW IN RECENT WEEKS, BUT WAS UNEVEN, AND REALLY SLOWED DOWN IN SEVERAL REGIONS AMID WEAKENING HOUSING MARKET EXHIBITION IN KAZAKHSTAN WITH THE END OF THE TAX CREDIT FOR ITS PURCHASE. SOME ALREADY ATTESTED IN ECONOMIC ACTIVITY, SOME REPORTED MODERATE GROWTH AND TWO PROVINCIAL CITY, ATLANTA AND CHICAGO REPORTED A SLOWDOWN IN ECONOMIC ACTIVITY.

WHILE THE MANUFACTURING SECTOR CONTINUES TO GROW IN MOST REGIONS, SLOWDOWN OR ALIGNMENT OF RATES OCCURRED IN NEW YORK, CLEVELAND, KANSAS CITY, CHICAGO, ATLANTA AND RICHMOND. THESE DATA ARE CONSISTENT WITH THOSE OF AN EARLIER REPORT, PUBLISHED ON WEDNESDAY, NEW ORDERS FOR COSTLY MANUFACTURED GOODS UNEXPECTEDLY FELL IN JUNE. THIS WAS THE SECOND FALL BOARD MONTH IN A ROW, THAT BASIS IS QUITE OMINOUS FOR FACTORY SECTOR.RETAIL SALES-GAUGE CONSUMER PARTICIPATION IN ECONOMIC ACTIVITY IN MANY STATES TO LOWER SALES OF NEW CARS AND "PROVISANII" IN THE REAL ESTATE MARKET.

ACTIVITY IN HOUSING MARKET WAS WEAK IN MOST REGIONS AFTER (30 April) OF TAX INCENTIVES, "SAID The FED, HAVING IN MIND THE PAST $ 8000, WHICH WAS PROVIDED AS AN INCENTIVE FOR FIRST-TIME BUYERS IS TRANSLITERATED INTO EREVAN. SOME IMPROVEMENT IN THE LABOUR MARKET, PARTLY BY TEMPORARY RECRUITMENT OF BOARD REPORTING. CONSUMER PRICES WERE STABLE IN MOST STATES, WAGE BASIS DESCRIBED AS" MODERATE ".

Reuters, THE FED said in certain areas, slowing our economy, 28 July 2010.

Telegraph: Russians spies. ARRESTED ANNE IN TEXAS FERMANOVA

24 YEAR-OLD RESIDENT OF DALLAS WAS DETAINED WHILE TRYING TO CARRY MODERN NIGHT-VISION GOGGLES And OTHER PROHIBITED DEVICE In RUSSIA. THESE DEVICES HAVE BEEN REMOVED AS IT WAS ON THE PLANE, FLYING EXHIBITIONS MOSCOW. HAD SHE WAS ARRESTED, WHEN RETURNED TO THE U.S. THIS MONTH. IN A PRESS RELEASE SAID THAT MISS FERMANOVA was arrested on 15 JULY IN A DELIBERATE ATTEMPT TO TRANSFER "DEVICE, REPORTED IN THE ARMS OF THE USA". NIGHT VISION CANNOT BE EXPORTED WITHOUT OFFICIAL PERMISSION, PRESIDED OVER THE DEPARTMENT OF THE USA, AS THEY ARE CONSIDERED TO BE A COMPLEX TYPE.

FERMANOVA WAS UNDER HOUSE ARREST, ITS PASSPORT CONFISCATED. IT IS EXPECTED THAT IT WILL BE SENT TO THE COURT IN NEW YORK AT THE END OF THIS MONTH, AFTER WHICH IT CAN WAIT 10 YEARS ' IMPRISONMENT. Scott Palmer (Scott Palmer), lawyer, said that the charges were based on "false allegations". ACCORDING TO THE HUSBAND, HE WOULD LIKE TO RESELL FREMANOVOJ PACEMAKERS TO HUNTERS. THE GIRL LIVES BETWEEN MOSCOW AND DALLASOM. SHE HAS BEEN TEACHING ENGLISH IN THE RUSSIAN CAPITAL.According to information from its page on Facebook, in 2005 it was licensed cosmetologist exhibitions Texas. ANNA FERMANOVA MOVED TO THE USA AS A CHILD WITH PARENTS FROM LATVIA.

Telegraph, Perin: beautician arrested attempting to smuggle night areas in Moscow, 27 July 2010

Source: FxTeam]] >

Reuters: Gold decreased by 2% amid weak data

AFTER MODERATE WEAK START OF THE TRADING SESSION, THE PRICE OF GOLD BULLION STARTED GAINING MOMENTUM TO FALL, REACHING $ 1.157.65 BOARD OUNCE, WHICH IS THE LOWEST PRICE from 5 May. FOR GOLD WAS THE MOST IMPORTANT ONE-DAY DROP SINCE July 1. SILVER AND PLATINUM, GOLD AND OIL WERE FOLLOWED BY BOARD AMID WEAK DATA ABOUT ZASTOJNOM GROWTH IN HOUSING PRICES, THE LABOUR MARKET AND OTKINULI JULY CONSUMER CONFIDENCE TO LOWEST LEVEL SINCE FEBRUARY.

GOLD, Max. 20 EXHIBITIONS TO BE EVALUATED AND POUNDS JUST FELL ON TUESDAY.GOLD EXHIBITIONS MAX 20 HAS FALLEN TO A MINIMUM since 4 MAY (892.23 MAX 20 BOARDS OUNCE) IN POUND FALLS TO 3-MONTH MINIMUM (OUNCE BOARD 744.30 POUNDS) of OTHER PRECIOUS METAL SILVER DECREASED TO $ 17.63 BOARDS OUNCE $ 18.14, PLATINUM OUNCE TO $ 1.530.50 BOARDS AGAINST $ 1.548.25, PALLADIUM TO $ 465 VS. $ 471.70.

Reuters, Gold falls 2% on weak data, 27 July 2010.

Source: FxTeam]] >

Reuters: Germany persists in Basel, however, wants more transparency

OFFICIALS AND ANALYSTS ALSO NOTED THAT IT WOULD BE A MISTAKE TO BELIEVE THAT THE GERMANS ON BANKING INDECISION STRESS TESTS AND BASEL IS THE OBSTRUCTION OF TIGHTENING GLOBAL REGULATION OF THAT COUNTRY, IN EFFECT, AND CHAIRS. ON MONDAY IN GERMANY WAS RAISED BY THE BASEL COMMITTEE ON THE BASIS OF AN ASSET HELD BY BANKS IN ORDER TO PREVENT THE WORST FINANCIAL CRISIS SINCE THE GREAT DEPRESSION.

THE COMMITTEE PLANS TO MINIMIZE MANY OF THE PROPOSALS MADE TO THE DRAFT IN DECEMBER LAST ZOLOTOPROMY?LENNIKOV THAT SPEAKS ABOUT ASSIGNMENTS IN LOBBYING BY BANKS AND GOVERNMENTS. HOWEVER, THE GERMAN REGULATORS STILL REFUSE TO SUPPORT IT. "We have doubts about the outcome of the Basel Committee on banking," spokeswoman Bundesbank Madeleine Pets?mann (Madleen Petschmann) on Tuesday.OFFICIAL BERLIN ARGUES THAT CURRENT PROPOSALS DO NOT GO HAND IN HAND WITH NUANCES OF SMALL AND MEDIUM-SIZED FIRMS AND THE LARGEST ECONOMY IN EUROPE ARE THE MAIN OFFICIALS CLAIM THAT. GERMANY ALSO ARDENTLY DESIRES THAT BANKS ARE LARGE, HIGH-QUALITY CAPITAL, IN FUTURE THEY CAN WITHSTAND SHOCKS WITHOUT THE HELP OF TAXPAYERS, BUT THE GERMAN SIDE IS POSTPONED.

Reuters, Germany wants to Basel Accord, but clearer rules 27 July 2010.

Source: FxTeam]] >

Bloomberg: growth doubled the number of environmental disasters in China

THE PROGRAM SUPPORTS 1.5 million JOB FAIRS 63 000 COMPANIES. ACCORDING TO THE FEDERAL EMPLOYMENT AGENCY, LAST YEAR, THANKS TO THIS PROGRAMME, 478.251. IN MARCH OF CURRENT ZOLOTOPROMY?LENNIKOV (DATA IN A REPORT FILED BEFORE MARCH) ABOUT 693.000 people ACHIEVE REDUCED WORKING HOURS. IN MAY 2009 ZOLOTOPROMY?LENNIKOV GOVERNMENT EXTENDED BENEFITS FOR THOSE WHO WORK PART-TIME FOR A MAXIMUM OF TWO ZOLOTOPROMY?LENNIKOV. BEFORE THE CRISIS, THESE BENEFITS HAVE A MAXIMUM OF SIX MONTHS.

GDP OF GERMANY CAN BE EXPANDED BY MORE THAN 7% OF EMPLOYMENT GROWTH, SUBJECT TO THE RETURN OF THE PAST, THE PRE-CRISIS HOURS. THE ACHILLES ' HEEL DESTINATIONS IS THE RELUCTANCE OF CONSUMERS TO SPEND. However, even with an export rate of GDP growth boom Bundesbank 1.9% this year and 1.4% as follows."REDUCED EMPLOYMENT, CERTAINLY HELPS MAKE UP FOR LOSSES In TIMES OF CRISIS, BUT THIS IS NOT A PANACEA FOR STRUCTURAL PROBLEMS; we should have no illusions about the employment market," said Andreas rice (Andreas Rees), Chief Economist at UniCredit MIB, Munich.

 

Bloomberg, German work "Miracle" comes at a price recovery, 28 July 2010.

Bloomberg: German Mirage employment "has its price to recover

THE PROGRAM SUPPORTS 1.5 million JOB FAIRS 63 000 COMPANIES. ACCORDING TO THE FEDERAL EMPLOYMENT AGENCY, LAST YEAR, THANKS TO THIS PROGRAMME, 478.251. IN MARCH OF CURRENT ZOLOTOPROMY?LENNIKOV (DATA IN A REPORT FILED BEFORE MARCH) ABOUT 693.000 people ACHIEVE REDUCED WORKING HOURS. IN MAY 2009 ZOLOTOPROMY?LENNIKOV GOVERNMENT EXTENDED BENEFITS FOR THOSE WHO WORK PART-TIME FOR A MAXIMUM OF TWO ZOLOTOPROMY?LENNIKOV. BEFORE THE CRISIS, THESE BENEFITS HAVE A MAXIMUM OF SIX MONTHS.

GDP OF GERMANY CAN BE EXPANDED BY MORE THAN 7% OF EMPLOYMENT GROWTH, SUBJECT TO THE RETURN OF THE PAST, THE PRE-CRISIS HOURS. THE ACHILLES ' HEEL DESTINATIONS IS THE RELUCTANCE OF CONSUMERS TO SPEND. However, even with an export rate of GDP growth boom Bundesbank 1.9% this year and 1.4% as follows."REDUCED EMPLOYMENT, CERTAINLY HELPS MAKE UP FOR LOSSES In TIMES OF CRISIS, BUT THIS IS NOT A PANACEA FOR STRUCTURAL PROBLEMS; we should have no illusions about the employment market," said Andreas rice (Andreas Rees), Chief Economist at UniCredit MIB, Munich.

Bloomberg, German work "Miracle" comes at a price recovery, 28 July 2010.

A vision of Europe against the background of improving impact of fading prospect in the u.s.

GERMAN BUSINESS CONFIDENCE GROWS, WHILE CONSUMER SENTIMENT IN THE US ARE FALLING. BRITAIN'S ECONOMIC GROWTH ALMOST DOUBLED IN THE SECOND QUARTER, WHICH WAS THE STRONGEST GROWTH FOR FOUR ZOLOTOPROMYŠLENNIKOV. IN THE MEANTIME, ECONOMISTS HAVE LOWERED GRADUALLY PREDICTIONS FOR FRIDAY'S REPORT ON THE U.S. GDP. AS IT TURNED OUT THAT EUROPE HAD BECOME WEAK ECONOMIC LINK IN THE GLOBAL ECONOMIC RECOVERY? WHATEVER THE EXPLANATION, THERE ARE SIGNS THAT BOTH REGIONS WILL BE "COOL" IN THE SECOND HALF.
Economists surveyed by Reuters, believe that THE U.S. economic growth slowed to 2.5% annual pace in the second quarter, falling from 2.7% in the first quarter and 5.6% in the last quarter of last zolotopromyšlennikov. BRITAIN'S GROWTH IN THE SECOND QUARTER WAS CLOSE TO THE ANNUAL RATE OF 4% 4. EXHIBITIONS.THE CONTRAST BETWEEN BRITAIN AND THE USA LOOKS EVEN MORE STRIKING. ALMOST ALL THE GROWTH THE BRITISH ECONOMY HAS THE PRIVATE SECTOR, MAINLY CONSTRUCTION AND SERVICES.
ECB President Jean-Claude Trichet Jons (Jean Claude Trichet) said on Friday it was time to "tighten belts" US WARNS EUROPE, HOWEVER, THAT TOO HASTY EXIT COULD UNDERMINE GLOBAL ECONOMIC RECOVERY DATA BOARD SECOND SEMESTER IN THE USA LOOK WEAKER EVERY BOARD OUT OF GOVERNMENT PROGRAMS, BUSINESS HAS ALREADY AMASSED SOME STOCKS, and TAX CREDITS FOR PURCHASE OF HOUSING.


Prospects for Europe, THE US fade, Reuters, July 25

Partial Discharge after stress

UP TO 2008 'S VERY RELUCTANT TO RECOGNIZE ZOLOTOPROMYŠLENNIKOV SHORTCOMINGS AND NOW DESPERATE TO FIX THEM IN ANY WAY. RISKS POSED BY CYBER-ESPIONAGE HAS CHANGED: INCREASED FREQUENCY, AS PERCEPTIONS OF SEVERITY. COULD BE MORE BLOCK SYSTEM FOR BETTER SECURITY, BUT IT DOES THE JOB LESS CONVENIENT.
IT IS IMPORTANT TO APPROACH THE SECURITY CYBER-SPACE. WE CANNOT COMPLETELY AVOID CYBER THREATS. IT WOULD BE TOO EXPENSIVE AND CUMBERSOME FOR THE ECONOMY. IT IS IMPORTANT ALSO TO DISTINGUISH BETWEEN THESE RISKS.EASY CLASH IN THE TRAFFIC JAM IS NOT THE SAME AS FAILURE AT HIGHER SPEEDS FOR STEALING A CREDIT CARD IS NOT THE SAME AS STEALING CORPORATE DATA OR DROP THE ENTIRE NETWORK.


Cyber risk, sure, but what? economist, 15 July

Financial Times: Uncle Sam case worse than year Greece

COMMON DUTY OF GREECE is 120 PER CENT OF GDP, HALF HIGHER THAN THE US. BUT ECONOMISTS CALL THIS MASKING PROBLEM BECAUSE GOVERNMENTS WISH TO CLASSIFY CERTAIN ARTICLES OF THE REVENUE AND EXPENDITURE. IF THE PAYMENT OF BENEFITS, PENSIONS AND HEALTH CONSIDERED BORROWING, THE BUDGET DEFICIT IS 3% OF GDP, NOT 9%.
IN THIS WAY COMPENSATE FOR THE PROBLEM OF CHILE IN THE PENSION REFORM in the early 1980s, AS WELL AS ARGENTINA – "REFORMIROVAVŠA» PENSIONS BUT NOT HAD FISCAL POLICY. ARGENTINA SOLD OBLIGATIONS PAID CASH.GREECE HAS DONE THE SAME. THEN DID FRANCE TO GET UNDER THE CRITERIA FOR JOINING THE EUROZONE.
BUT ALL THESE COUNTRIES LEARN FROM UNCLE SAM BASELINE YEAR For half a century THE US sold. tens of trillions of informal commitments to social security, Medicare, and Medicaid, 40 times higher than official duty.
CONGRESSIONAL BUDGET OFFICE ESTIMATES INVOLVING HOLE 12.2% THIS YEAR, IN AND OF ITSELF INVOLVES TIGHTENING BELTS 7.2% OF GDP by 2020.
US IN DEEP AND PERMANENT ECONOMIC GRAVES. GONE ARE THE DAYS OF CLEAR LONG-TERM BUDGETARY PLANNING, SOIZMERÂEMOGO WITH PEOPLE AND THROUGH RADICAL REFORMS LEADING AMERICAN TAXES.

Uncle Sam is worse than Greece woes, Financial Times, 25 July