The Too Big To Fail: Federal Reserve Bank At 100 Years Of Age
Forbes
As the markets reach new highs, and scandal dominates the nation’s capitol, I am compelled to
examine the still unresolved challenges about whether our 100 year old central bank– the Federal Reserve– will be capable of warding off another potential systemic financial crisis like the one that almost toppled the economy in 2008.
http://jlne.ws/10hdtov
Central bankers everywhere after Bernanke warning
Reuters
It’s raining central bankers today which is well-timed after Federal Reserve Chairman Ben Bernanke dropped the bombshell that the Fed could take the decision to begin throttling back its money-printing programme at one of its next few policy meetings.
http://jlne.ws/11fOGTa
Fed Blog Post May Offer A Clue On Timing Of Interest Rate Hikes
Forbes
When might the Fed raise interest rates again? Perhaps at the end of 2014.
http://jlne.ws/11fPmId
Treasuries Rise as Investors Win Largest Share of TIPS Auction
Bloomberg
Treasuries rose after investors won the largest share of 10-year inflation-indexed notes sold today at any auction since at least 2003 amid renewed debate over whether the Federal Reserve will slow monetary stimulus.
http://jlne.ws/11fMnzm
House approves bill on student loans interest rates
The Associated Press (via The Boston Globe)
House lawmakers on Thursday approved legislation that links student loan rates to the ups and downs of the financial markets in spite of a veto threat from President Barack Obama.
http://jlne.ws/11fPcRa
Moody’s Defied as Local Bond Risk Falls to 2010 Low: Muni Credit
Bloomberg
Investor confidence in U.S. municipal debt is the highest in three years even as Moody’s Investors Service warns that local-government credit quality is set to weaken for the 18th straight quarter.
http://jlne.ws/11fMXgJ
Understanding deliverable swap futures
HedgeWeek
With the Dodd-Frank clearing mandate underway, market participants are looking for more capital efficient alternatives for their OTC activity. Deliverable Swap Futures (DSF) may provide a solution for those looking to obtain interest rate swap exposure, but who want the efficiencies and margin savings of standardised Futures contracts.
http://jlne.ws/11fO7c6
Primary Dealers Saw Fed’s Confusing Strategy Reducing QE Impact
Bloomberg
The 21 primary dealers that trade securities directly with the Federal Reserve Bank of New York, said that confusion about the central bank’s intentions for its bond-buying program is reducing the policy’s effectiveness.
http://jlne.ws/11fNAGZ
Fed chairman Ben Bernanke: stimulus programme not creating ‘bubbles’
The Guardian
Federal Reserve chairman Ben Bernanke denied his $85bn-a-month stimulus programme was creating new financial bubbles as he updated Congress on his views on the US economic recovery on Wednesday.
http://jlne.ws/11fPLKD
U.S. 10-Year TIPS Sale May Yield Negative 0.244%, Survey Shows
Bloomberg
The government’s $13 billion auction of 10-year inflation-indexed notes may draw a yield of negative 0.244 percent, according to the average forecast in a Bloomberg News survey of eight of the Federal Reserve’s 21 primary dealers.
http://jlne.ws/11fNLSB
ProShares Launches New High Yield Bond ETF with Built-In Interest Rate Hedge
ETF Daily News
ProShares, a premier provider of alternative exchange traded funds (ETFs), today announced the launch of ProShares High Yield—Interest Rate Hedged (BATS: HYHG), a new high yield bond ETF that uses Treasury futures to provide a built-in hedge against rising interest rates.
http://jlne.ws/11fOdk1
Volatility Index for 10-Year Treasury Options Begun by CBOE, CME
Bloomberg
The Chicago Board Options Exchange and the CME Group Inc. started an index that measures the pace of projected swings in U.S. 10-year Treasury futures.
http://jlne.ws/11fNa3x
IMF Staff Suggests Tighter Debt Rules to Improve Restructuring
Bloomberg
The International Monetary Fund may have been too optimistic in assessing the debt sustainability of some borrowing countries and could toughen loan conditions in an effort to make debt restructuring more successful, according to the fund’s staff.
http://jlne.ws/11fN1x3
OTC clearing: Phase two of swaps clearing for Dodd-Frank is only weeks away
HedgeWeek
New global rules for OTC derivatives have been implemented in the US and are imminent in Europe that will have significant long-term implications for how hedge funds, asset managers and regional banks execute, clear, and report their swap positions.
http://jlne.ws/11fOweq
Spanish Bonds Slide With Italy’s Amid Signs of Global Slowdown
Bloomberg
Spanish and Italian bonds led losses among the securities of Europe’s so-called peripheral nations as China’s manufacturing and euro-area services and factory output all contracted, sapping demand for higher-yielding assets.
http://jlne.ws/11fMzif
Kuroda Struggles With Communications Test as Bond Yields Climb
Bloomberg
Installed as head of the Bank of Japan in March, Kuroda aims to unlock borrowing and spending by lifting inflation expectations and wages after 15 years of deflation. Market volatility partly triggered by the BOJ’s record bond-buying now threatens to sap business and consumer confidence and weaken the campaign to reflate the world’s third-biggest economy.
http://jlne.ws/11fMFX4
German 10-Year Bunds Erase Gain After U.S. Jobless Claims Data
Bloomberg
German 10-year bunds erased an advance after a report showed fewer Americans than projected filed applications for unemployment benefits last week.
http://jlne.ws/11fNTSl
Bernanke says more progress needed before stimulus pullback
Reuters
The Federal Reserve’s monetary stimulus is helping the economy recover but the central bank needs to see further signs of traction before taking its foot off the gas, Fed Chairman Ben Bernanke said on Wednesday.
http://jlne.ws/10Muvq0
Dudley Says Decision on Taper Will Require 3-4 Months
Bloomberg
Federal Reserve Bank of New York President William C. Dudley said policy makers will know in three to four months whether the economy is healthy enough to overcome federal budget cuts and allow the central bank to begin reducing record stimulus.
http://jlne.ws/10Mt0Iu
U.S. 10-Year Yield Tops 2% as Bernanke Says Fed May Taper Buys
Bloomberg
Treasuries fell, pushing 10-year note yields above 2 percent for the first time since March, after Federal Reserve Chairman Ben S. Bernanke told Congress the Fed may cut the pace of bond purchases at the next few meetings if policy makers see indications of sustained economic growth.
http://jlne.ws/10MsB8W
U.S. Bank Capital at Risk When Bond Gains Evaporate, Fitch Says
Bloomberg
About $25 billion in unrealized bond gains are at risk from rising interest rates that may erode capital levels at some of the largest banks by 1 percentage point or more, according to Fitch Ratings.
http://jlne.ws/10Mt8I5
Text: Federal Reserve meeting minutes
USA Today
A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, April 30, 2013, at 2:00 p.m. and continued on Wednesday, May 1, 2013, at 9:00 a.m.
http://jlne.ws/10MvKp8
Wall Street falters in volatile session on Fed worries
Reuters
Stocks fell on Wednesday with the S&P 500 posting its biggest decline in three weeks, after minutes from the latest U.S. Federal Reserve meeting showed some officials were open to tapering large-scale asset purchases as early as at the June meeting.
http://jlne.ws/10MvSVG
EU Said to Toughen Creditor-Loss Rules for Bailed-Out Banks
Bloomberg
The European Union will tighten its rules on bailouts for banks, setting out tougher requirements for creditors to face losses if public money is used, according to two people familiar with the matter.
http://jlne.ws/10Mt62V
German Bonds Snap Two-Day Decline Before Euro-Area PMI Reports
Bloomberg
German government bonds snapped a two-day decline before data tomorrow that economists said will show output in the euro-area’s manufacturing and services industries contracted this month.
http://jlne.ws/10MsHxc
Bank of Japan vows market steps to curb bond turbulence
Reuters
The Bank of Japan vowed on Wednesday to take necessary steps to reduce volatility in bond markets that has threatened to jeopardize the government’s fight to end deflation and revive growth.
http://jlne.ws/10MtEWg
Russia Cancels Bond Auction as Rate Outlook Drives Up Yields
Bloomberg
Russia abandoned the sale of $1.1 billion of ruble bonds, the first cancellation of an auction since October, after yields surged on concern policy makers will refuse to lower interest rates to bolster growth.
http://jlne.ws/10MsN80
Brazil’s Tombini: Central Bank Will Act in ‘Timely Manner’ on Key Rates
The Wall Street Journal
The president of Brazil’s central bank on Tuesday reaffirmed his commitment to taming inflation, reiterating the central bank’s key phrase that it will act in a “timely manner.”
“The central bank is vigilant and will do what’s needed, in a timely manner, to ensure inflation declines,” Mr. Tombini said in a meeting with Lower House lawmakers.
http://jlne.ws/10Mvc2N
Caisse Joins HSBC Dumping Bonds as Returns Shrink: Canada
Bloomberg
Canada’s biggest pension-fund manager will “significantly” cut its C$64 billion ($62.3 billion) allocation to bonds as the fixed-income market’s foothold among its most loyal base of investors grows less certain.
http://jlne.ws/10Mtf6g
How rigged are the markets? Libor, ISDAfix, and now the oil price…
QFinance
It seems that news about the fixing of trillion dollar markets is becoming, well, rather routine. First there was Libor, then there was the announcement that the Commodities Futures Trading Commission (CTFC) was investigating the possible rigging of the interest rate swap rate, another market in the hundreds of trillions.
http://jlne.ws/192jqsv
Treasuries Advance After Fed Officials Back Bond-Buying Stimulus
Bloomberg News
Treasuries rose for the first time in three days as comments from Federal Reserve officials added to speculation Chairman Ben S. Bernanke will emphasize the need to sustain stimulus when he speaks before Congress tomorrow.
http://jlne.ws/14uIju2
Bund Yields Rise to 9-Week High as Bundesbank Sees Faster Growth
Bloomberg News
German government bonds fell, pushing 10-year yields to the highest level in nine weeks, after the Bundesbank said the economy will improve “markedly” this quarter, damping demand for the region’s safest securities.
http://jlne.ws/192fxnm
World stocks hit records as US Treasuries rise
The Age
The Standard & Poor’s 500 Index returned to a record as a Federal Reserve official said bond purchases should continue and Goldman Sachs Group Inc. forecast the stock rally will last at least through 2015. Treasuries rose and the yen pared earlier losses while grains and gold fell.
http://jlne.ws/192iVyK
Low Rates Can Raise Risks at Canadian Banks, Dickson Says
BloombergBusinessweek
Julie Dickson, Canada’s banking regulator, said the current period of low interest rates threatens to increase risks for the country’s lenders and that it has become an issue she’s closely monitoring.
http://jlne.ws/192jRmD
Dudley Says He Can’t Be Sure If Next QE Move Is ‘Up or Down’
Bloomberg
Federal Reserve Bank of New York President William C. Dudley said he has not decided whether the Fed’s next move should be to enlarge or shrink its bond buying program as he called for a fresh look at its eventual retreat from record asset purchases.
http://jlne.ws/192l0KX
Fed’s Bullard Opposes Pulling Back on Federal Reserve Bond Purchases
The Wall Street Journal
There is no case yet for tapering the U.S. Federal Reserve’s current quantitative easing program until inflation picks up, St. Louis Fed President James Bullard said Tuesday.
http://jlne.ws/14Ozs5P
Agency MBS: most thankful for the Fed’s dovish sentiment?
MarketWatch
U.S. markets spazzed with toddler-like glee when Fed officials gave remarks Tuesday indicating commitment to current monetary policies. But although equities and Treasurys gained on the statements of central bankers, the agency mortgage-backed security market may have gotten the biggest sugar high.
http://jlne.ws/192li4A
Pound Slides to Six-Week Low Versus Dollar as Inflation Slows
Bloomberg News
The pound slid to a six-week low against the dollar after a government report showed inflation slowed more than economists forecast, giving the central bank more room to boost stimulus that tends to weaken a currency.
http://jlne.ws/192ggoG
CFTC Said Preparing ISDAfix Probe Talks in Weeks: Credit Markets
Bloomberg News
Commodity Futures Trading Commission investigators are poring over 1 million e-mails and instant messages as part of their price-manipulation probe of a swaps benchmark that helps determine interest rates on everything from annuities to bonds linked to skyscrapers.
http://jlne.ws/10hc2X9
CFTC To Investigate Whether Benchmark Was Rigged
May 21, 2013 • Bloomberg News
Commodity Futures Trading Commission investigators are poring over 1 million e-mails and instant messages as part of their price-manipulation probe of a swaps benchmark that helps determine interest rates on everything from annuities to bonds linked to skyscrapers.
http://jlne.ws/14uNgDa
European share rally stalls on doubts about Fed support
Reuters
European shares fell from multi-year highs on Tuesday on concerns the U.S. central bank could call an earlier-than-expected halt to the stimulus programme that had underpinned demand for stocks.
http://jlne.ws/192j2tW
Investors price out Greek default as curve normalises
Reuters
Greek 10-year bond yields fell below longer-dated ones on Tuesday for the first time in three years as investors priced out the risk of Athens defaulting.
http://jlne.ws/192jhp9
China’s Interest-Rate Challenge
Project Syndicate
China’s successful transformation from a middle-income country to a modern, high-income country will depend largely on the reforms that the government undertakes over the next decade. Financial reforms should top the agenda, beginning with interest-rate liberalization. But liberalizing interest rates carries both risks and rewards, and will create both winners and losers, so policymakers must be prudent in their approach.
http://jlne.ws/192jEA3
Aso asks BOJ to communicate with market as interest rates volatile
GlobalPost
Finance Minister Taro Aso on Tuesday asked Bank of Japan chief Haruhiko Kuroda to continue communicating with the market as concern is growing that a possible further spike in the country’s long-term interest rates may have an adverse effect on the economy.
http://jlne.ws/192k3T0
Brazil cenbank keeps hawkish tone ahead of rate decision
May 21 (Reuters) – Brazil’s central bank chief Alexandre Tombini said on Tuesday that policymakers will do whatever is necessary to bring down inflation, maintaining a hawkish tone ahead of next week’s monetary policy decision.
http://jlne.ws/192gVGA
CMA plans a futures and options market segment at NSE
The Star
The Capital Markets Authority will invite and start receiving applications for futures exchanges from August if the regulations are gazetted by then.
It has published, for public comment, the first set of draft regulation on licensing requirements. The three draft regulations will be necessary for establishing a derivatives and futures exchange in the country. The other regulations will be on futures contracts and futures market intermediaries.
http://jlne.ws/192hlga
Stock futures steady ahead of Fed speakers
MADRID (MarketWatch) — U.S. stock futures were little changed on Tuesday with investors expected to look for more clues on any tapering of the Federal Reserve’s easing program. Two Fed presidents with voting rights on the interest-rate-setting committee are due to hit the tape.
http://jlne.ws/192hUGP
