Parsing the Federal Reserve
The Federal Reserve left a lot of people scratching their heads this week. Between Chairman Ben Bernanke’s testimony, and the release of the minutes to the May 1st Federal Open Market Committee, investors were struggling to figure whether an end to easy monetary policy was nigh.
Are Treasury and the Fed at Odds Over Big Banks?
Treasury Secretary Jacob Lew has been cagey about whether he thinks Wall Street’s giant banks are getting dangerously large and out-of-control once again, as many experts believe.
Treasuries Advance as Highest Yields in Two Months Renew Demand
Treasury 10-year notes rose as the highest yields since March bolstered demand while investors debated whether the economy is strengthening enough for the Federal Reserve to consider slowing stimulus measures.
New CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (VXTYN)
Matt Moran, CBOE
CBOE and CBOE Futures Exchange (CFE) plan to offer trading on the 10-year Treasury Volatility Index in the future. The VXTYN Index has the potential to become a popular gauge if there is a future rise in both interest rates and interest rate volatility.
Federal Reserve risks boom and bust as QE dilemma presses
This week’s episode was a classic. First, Ben Bernanke suggested on Wednesday that the time was not right to withdraw “accommodative” monetary policy. Then he said the Fed committee could make a decision to reduce its $85bn-a-month quantitative easing programme at the “next few meetings” if the economic data warranted such a move.
Wall Street Bothered by Fed Worries
Reuters (via The New York Times)
Wall Street was mainly lower for a third day on Friday on lingering concern the Federal Reserve may scale back its support to the economy.
Draghi Says Bond-Buying Pledge Helps Transmit Rates
European Central Bank President Mario Draghi said his pledge to buy government bonds is helping to ensure that interest-rate cuts reach the parts of the euro-area economy that need them the most.
Will Rising Interest Rates Hurt the Stock Market?
U.S. News & World Report
You can’t listen to the news these days without hearing about how interest rates are at historic lows. In 1981, the 10-year Treasury hit an all-time high of nearly 16 percent. Since then, interest rates have been steadily falling to their current value of around 2 percent.
U.S. Corporate Credit Swaps Climb Before Durable Goods Report
A gauge of U.S. corporate credit risk rose for a third day before data on durable goods orders.
Low interest rates are the final straw for many company pensions
The Washington Post
It was no small matter for the ILM Group’s executives when they froze the pension plan that has provided retirement security for the firm’s employees since 1947.
Dealers Absorbing Junk Bonds as ETF Demand Drops: Credit Markets
Wall Street banks are expanding holdings of speculative-grade bonds as prices fall from record highs with investors retreating from exchange-traded funds that buy the debt.
IRS announces third quarter 2013 interest rates
CPA Practice Advisor
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.
Exchanges, Clearing Houses & MTFs
Eurex may copy CME swap futures
German exchange seeking legal advice on scope of Goldman Sachs patent behind CME’s interest rate swap futures.
Firms & Banks
Comparing Net Interest Margins For The Country’s Biggest Banks
Investors have expressed some serious concerns about the impact of shrinking net interest margins (NIM) for the country’s biggest banks on their value in the recent past – especially for banking giants Wells Fargo (NYSE:WFC) and U.S. Bancorp (NYSE:USB) which rely on the traditional loans-deposits model for a majority of their income.
Federal Reserve Board Implements Rule On Retail Foreign Exchange Transactions
The Federal Reserve Board (“FRB”) has adopted Regulation NN covering retail foreign exchange transactions (“retail forex transactions”) of banks.1 Regulation NN implements section 742(c)(2) of the Dodd-Frank Act, which amends the Commodity Exchange Act (“CEA”) to provide that a regulated U.S. financial institution may not enter into, or offer to enter into, certain types of foreign exchange transactions with a retail customer except in compliance with a rule or regulation of a federal regulatory agency allowing the transaction.
Abe fears spike in long-term interest rates could hurt economy
Prime Minister Shinzo Abe expressed concern Friday that a spike in Japan’s long-term interest rates could drag down the economy, as financial markets have recently become volatile due in part to the Bank of Japan’s massive fund injection into the market.
China vows to liberalise interest rates, push yuan reforms
China will continue to liberalise interest rates, make the yuan currency more responsive to market forces and more convertible this year, the government said on Friday.
Singapore Dim Sum Debt Planned as Yuan Clearing Spreads
HSBC Holdings Plc (HSBA) and DBS Group Holdings Ltd. are planning the first-ever sales of yuan-denominated bonds in Singapore as the city competes with Hong Kong and Taiwan as an offshore hub for the currency.
Spanish Bonds Extend Slump to Second Day as Italian Debt Tumbles
Spanish bonds fell, with 10-year yields posting the biggest two-day gain in more than three months, as the Federal Reserve’s signal it may slow asset purchases reduced demand for higher-yielding assets.