GFI Group Inc. Becomes JLN IR & MarketsWiki Sponsor
John Lothian News is pleased to announce GFI Group Inc. has become a Partner level sponsor of JLN Interest Rates and a Friend level sponsor of MarketsWiki and MarketsReformWiki.
“We are pleased to begin an advertising sponsorship with John Lothian News, MarketsWiki and MarketsReformWiki. All are great news and reference sources for the financial services industry and we look forward to participating in the coming year,” said Helena Jarabakova, vice president and head of marketing for GFI.
“We are grateful for the support of GFI,” said Christine Nielsen, managing editor of John Lothian News and editor of JLN IR. “There is so much going on in the interest rate sector in terms of regulation and market development, and GFI is a part of it. We look forward to working closely with GFI in the coming year.”
About GFI Group Inc.
GFI Group Inc. (NYSE: “GFIG”) is a leading provider of wholesale brokerage services, clearing services, electronic execution and trading support products for global financial markets. GFI Group Inc. provides brokerage services, market data, trading platform and analytics software products to institutional clients in markets for a range of fixed income, financial, equity and commodity instruments.
Headquartered in New York, GFI was founded in 1987 and employs more than 2,200 people with additional offices in London, Paris, Nyon, Hong Kong, Seoul, Tokyo, Singapore, Sydney, Cape Town, Santiago, Bogota, Dubai, Dublin, Tel Aviv, Calgary, Los Angeles and Sugar Land (TX). GFI Group Inc. provides services and products to over 2,600 institutional clients, including leading investment and commercial banks, corporations, insurance companies and hedge funds. Its brands include GFI(SM), GFInet, CreditMatch, GFI ForexMatch, EnergyMatch, FENICS, Starsupply, Amerex, Trayport and Kyte.
– Note: Christine Nielsen is starting 2012 with a holiday. Nicole V. Rohr, JLN web content editor, was the editor for this newsletter.
Fed Forecasts Pose Risk For Soft Interest-Rate Futures Volume
Trading in futures contracts linked to U.S. interest rates could decline following a decision by the Federal Reserve to publish an explicit timetable for when it expects to take action.
Fed Boosts Transparency With Decision to Reveal Rate Forecasts
A decision to reveal forecasts for the federal funds rate starting this month represents the biggest step toward openness since Bernanke took office in 2006 promising greater transparency, according to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. and a former Fed board economist. The central bank didn’t even start announcing changes in interest rates until 1994.
Q+A: Why the Fed is publishing interest rate forecasts
The Federal Reserve will begin this month to publish policymakers’ forecasts for interest rates, including when interest rates, which are currently near zero, will rise. The move, announced on Tuesday, could give the sluggish economic recovery a bit more lift by better aligning bets in financial markets with the consensus view at the central bank.
The Fed’s new openness policy will create confusion, not clarity
Christian Science Monitor
We believe Fed officials publishing their expectations for the timing of the first rate increase could increase market volatility as differences between the members’ economic forecasts and actual figures that do not impact the projected policy path may confuse market participants. The Fed acknowledges these risks but views these concerns as “manageable.” We view the step as making the Fed more transparent while not doing much to improve clarity.
Fresh Data Damp Hopes for Europe
Doubts over Europe’s strategy to overcome its debt woes re-emerged Thursday amid fresh evidence that the region is in recession, reinforced by concerns about the fragility of its banks. With investors worried about the government funding needs this year—euro-zone governments will need to refinance more than 1 trillion euros (about $1.29 trillion) of maturing short-term and long-term debt in 2012—yields on Italian 10-year bonds crept above 7% and Europe’s bailout fund had to offer higher interest rates than in the past to place 3 billion euros of debt.
Euro hit as investors fret over Europe’s banks
For a second day running, market concern has centered on the state of the banks following UniCredit’s announcement Wednesday that it was selling new shares at a 69 percent discount to Tuesday’s closing price. Renewed fears over Europe’s shaky banking sector sent the euro skidding to a 15-month low against the dollar Thursday, while stock markets failed to get much of a boost from another round of upbeat U.S. economic data
European Stocks Decline on Bank-Capital Concern; UniCredit Sinks
European stocks declined for a second day as concern that the region’s banks will have to raise capital overshadowed a report showing that U.S. companies added more workers to their payrolls than economists had predicted. UniCredit SpA, which announced a rights offer at a 43 percent discount yesterday, slumped to a 19-year low. Societe Generale SA dropped 4.5 percent after announcing it will cut corporate- and investment-banking staff.
Eurozone crisis, MF Global chill trading at CME Group
CME Group and IntercontinentalExchange said on Wednesday that trading volume dropped last month, which analysts attributed to MF Global’s collapse and Europe’s debt crisis chilling trading in U.S. futures markets. Chicago-based CME, the biggest U.S. futures exchange operator, said trading dropped 9 percent last month to an average of 9.6 million contracts a day, taking the shine off a record-setting year.
Hungary ready to discuss IMF loan: report
Hungary on Thursday indicated it was ready to negotiate a standby loan with the International Monetary Fund without setting preconditions and was also open to discussing a recent law that critics say compromises the independence of the country’s central bank, The Wall Street Journal reported. “The government is aware of how severe the situation is and what’s at stake at the talks with the IMF,” said Tamas Fellegi, the country’s chief negotiator with the Fund.
Consumer bureau to wield new powers, but challenges loom
Obama on Wednesday made a recess appointment of former Ohio attorney general Richard Cordray to be the first director of the Consumer Financial Protection Bureau. With President Obama’s recess appointment of a new chief to run the consumer bureau, the agency can flex new powers regulating financial products from non-banks — including student loan providers, debt collectors, payday lenders, and mortgage originators and servicers.
Obama Chooses Politics Over Principle in Naming Consumer Bureau Head: View
President Barack Obama bypassed the U.S. Senate and summarily installed Richard Cordray, the former Ohio attorney general, as director of the Consumer Financial Protection Bureau yesterday. Hours later, Obama filled three vacancies on the National Labor Relations Board, possibly the only agency Republicans dislike more than the consumer bureau.
Cordray: Consumer agency to target shadow banks
In his first speech as head of the Consumer Financial Protection Bureau, Richard Cordray said his agency will immediately begin overseeing lenders outside the banking industry, and will take a tough stance against any financial players that break the law.
The Use of ABX Derivatives in Credit Crisis Litigation
Since 2007, the losses and write-downs resulting from the credit crisis have reached over $2 trillion worldwide. As the losses have mounted, securities litigation has followed and over 450 related securities cases, both class actions and others, have been filed. Of particular interest to the litigation are a set of credit default swaps (CDS), or credit derivatives, known as the ABX indices (ABX).
Fixed Income Markets 2012
January 24, 2012
Tabb Forum Looks At Changes Ahead And Staying Ahead In Fixed Incomes
Treasury Futures: Using International Fixed-Income and Money Market Spreads
January 31, 2012
The IFM Instructs On Using Fixed Income And Money Market Spreads
Eurodollar (LIBOR): Building Blocks for Interest Rate Swaps
January 26, 2012
The Institute for Financial Markets
National Association of Home Builders’ Show
February 10, 2012
Special Session With Fed’s Bernanke Open To All Registered Attendees
The Fed’s Advice on the Housing Crisis
The Federal Reserve tried Wednesday to stir interest among policy makers in the problems afflicting the housing market, sending a white paper to Congress outlining suggestions for easing those problems.
Treasury prices fall after auto sales and jobs data point to improving economy
The Washington Post
Americans bought about 10 percent more cars in 2011 than in 2010 and analysts expect the momentum to continue in 2012. Also the Labor Department reported that unemployment rates fell in three-quarters of large U.S. cities in November. The improved economic news sent the benchmark U.S. Treasury note down 31.2 cents for every $100 invested on Wednesday. Its yield, which trades in the opposite direction, rose to 1.98 percent from 1.95 percent Tuesday.
Number of people seeking unemployment aid falls to 372,000, signaling stronger job market
The Washington Post
The number of people seeking unemployment benefits fell further last week, ending the year on a three-month run of declines that point to stronger hiring in 2012. Weekly applications dropped by 15,000 to a seasonally adjusted 372,000 last week, the Labor Department said. That’s 11 percent lower than the same time last year and a positive sign ahead of Friday’s important read on December job growth.
Manufacturing in U.S. Expands by Most in Six Months
U.S. factories expanded in December at the fastest pace in six months, adding to evidence manufacturing is improving from India to the U.K. entering 2012.
New Pentagon defense strategy puts more focus on Asia
President Barack Obama unveiled adefense strategy on Thursday that calls for greater U.S. military presence in Asia and envisions cutting troops in Europe as thePentagon seeks to reduce spending by nearly half a trillion dollars after a decade of war.
Exchanges, Clearing Houses & MTFs
LCH.Clearnet appoints Lisa Rosen as Group Head of Compliance and Public Affairs
LCH.Clearnet Group Ltd (LCH.Clearnet) has appointed Lisa Rosen as Group Head of Compliance and Public Affairs. Previously, Lisa was Managing Director, Global Head of Regulatory Affairs at Barclays Capital in London. In this newly created role, Lisa will oversee LCH.Clearnet’s regulatory and lobbying activities. She will report to Christophe Hémon, Group COO.
OCC Cleared Contract Volume Reached 4.6 Billion Contracts in 2011 for Record Year
OCC announced today that total cleared contract volume in 2011 reached 4,600,955,949 contracts, a 17 percent increase over the 2010 volume of 3,925,686,805 contracts. 2011 marked the ninth consecutive year of record volume for OCC and the first time cleared contract volume surpassed 4 billion contracts.
Firms & Banks
UniCredit selloff highlights bank sector woes
Shares in UniCredit SpA have tumbled after the Italian lender announced it would sell shares at a massive discount, shaking investor confidence in the health of European banks.
SocGen Leads French Bank Shares Lower Before Nation’s Debt Sale
Societe Generale SA, France’s second- largest bank, fell as much as 5.4 percent in Paris trading, leading declines among the country’s lenders as the government plans its first debt sale of 2012.
SNB Chief to Stay On Amid Deals Controversy
Swiss National Bank President Philipp Hildebrand Thursday sought to defuse a controversy over currency transactions he and his wife made last year, asserting that he broke no rules and would not resign but admitting that the incident had raised ethical questions.
Gross Backs Away From New Normal After Missing Bond Rally
Bill Gross is backing away from Pacific Investment Management Co.’s outlook for a “new normal” after lagging behind the majority of his peers during the biggest bond-market rally in nine years. The period of muted growth in developed economies, high unemployment and “relatively orderly” deleveraging that Mohamed El-Erian, who shares the title of chief investment officer with Gross, coined in the aftermath of the 2008 financial crisis appears to be morphing into a world of credit and zero-bound interest-rate risk, said Gross, the founder of Pimco and manager of the world’s biggest bond fund.
Barclays Sets Pricing On Sterling Covered Bond, Swaps +1.90 Area
Barclays Bank PLC (BCS) has set pricing on its sterling- denominated, benchmark-sized, 10-year covered bond in the area of 190 basis points over midswaps, one of the banks running the deal said Thursday.
Blackstone reaches megafundraising finish line
Blackstone Group LP will conclude fundraising for its latest buyout fund in January, raising just over $16 billion, three people familiar with the matter said on Wednesday, in a 4-year process challenged by the global financial crisis.
Auctions & Statistics
French bond auction fails to dissuade downgrade worries
The French auction of about € 7.9 billion on bonds included more than € 4 billion worth of 10-year bonds, with a yield of 3.29% and a bid-to-cover ratio of 1.64%. That’s not too shabby, considering the 10-year is trading at 3.32%, but anxiety continues to dog European bond markets.
Market Morning: Looking Lower
France sold mostly 10-year notes in the bond auction Thursday. Investors asked for an interest rate of 3.29% to lend France €4.02 billion in 10-year money, up from 3.18% in December, according to The Associated Press. Demand was strong at the auction.
Bunds up, focus turns to Italian, Spanish auctions
German Bunds rallied on Thursday and French paper reversed earlier losses after France drew solid demand at an auction of almost 8 billion euros of bonds. However, bonds issued by Italy, Spain and Belgium were under pressure ahead of Spanish and Italian auctions next week which are seen as their first major financing tests of the year and Bunds may find further support ahead of them.
New Fed voters make weaker U.S. dollar likely for 2012 (UUP, AUS, BZF)
The three incoming members of the Federal Reserve Open Market Committee are much stronger advocates of monetary measures to stimulate the US economy, almost ensuring that a third round of quantitative easing is on the way. If so, look for the US dollar to go on the defensive.
Geithner plans Asia trip to discuss Iran
U.S. Treasury Secretary Timothy Geithner will travel to Asia to discuss pressuring Iran to rethink its alleged nuclear weapons program, the department said.
A New Diversity Monitor for the S.E.C.
A provision of the Dodd-Frank Act aimed at bringing more women and minorities to the male-dominated world of finance is moving one step closer to being implemented, after the Securities and Exchange Commission announced this week that it had named Pamela A. Gibbs to head its recently created Office of Minority and Women Inclusion.
AMR shares to trade over the counter
American Airlines parent AMR Corp., whose shares are being removed from the New York Stock Exchange, says the stock will be available on over-the-counter markets beginning Thursday. It will trade on the OTCQB market under the ticker symbol “AAMRQ,” the company said.
Simba Energy Inc. Joins OTCQX
OTC Markets Group Inc. (otcqx:OTCM), the financial information and technology services company that provides the world’s largest electronic marketplace for broker-dealers to trade unlisted stocks, announced that Simba Energy Inc. (otcqx:SMBZF)(tsx.v:SMB) is now trading on the highest tier of the OTC market, OTCQX®. Simba Energy is an oil and gas exploration company focused on overlooked and under explored basins in Africa.
Brazil Suffers Assault on Bank Integrity With Tombini Rate Cuts
Brazilian central bank board member Carlos Hamilton so disagreed with a surprise interest-rate cut in August that he slammed phones and stomped through hallways, according to three bank officials familiar with his reaction.
Treasuries Advance as Europe’s Debt Crisis Boosts Demand for Safe Assets
Treasury 30-year bonds rose for the first time in three days as an increase in borrowing costs in France and Hungary added to concern the region’s debt crisis is spreading, boosting demand for the safest securities.
Hungary open to discuss standby deal with IMF
Hungary’s top financial negotiator said his nation is open to working out a standby loan with the International Monetary Fund but insisted Thursday that Hungary was still able to finance its debts from the markets. That situation could change soon. Hungary’s debt management agency sold less than the full amount on offer at an auction Thursday of 12-month Treasury bills, with the average yield rising to 9.96 percent — more than 2 percentage points higher than at a similar auction Dec. 22. That is also significantly higher than the 7 percent level that forced three other European nations to seek bailouts.
India’s Monetary Cycle Has Peaked: Deputy Central Banker
The deputy governor of India’s central bank said the equation between growth and inflation in the country has become much more balanced in the last few months and indicated that interest rates were unlikely to rise further, though he stopped short of saying whether the next move would be a rate cut.
Swiss central bank chief to explain dollar deals
Switzerland’s central bank chief was breaking his silence Thursday over a private currency deal that appeared to net his family big profits at a time when he was spearheading efforts to lower the value of the Swiss franc. In a bid to counter a national uproar, the Swiss National Bank said its President Philipp Hildebrand would hold a news conference in Zurich to discuss “financial transactions and events of recent days.”
Sweden Shows Europe How to Cut Debt, Weather the Recession: View
Sweden faces a difficult year, like every other European economy, but unlike the rest of the European Union, it’s equipped to cope. There are lessons here, especially for the EU’s other non-euro countries. Scandinavia’s biggest economy will see growth slow to less than 1 percent in 2012, down from an impressive 4.5 percent in 2011, according to the National Institute of Economic Research. Sweden relies heavily on exports to the rest of Europe, and the EU’s protracted economic crisis will set it back.
Will China Come in for a Hard or Soft Landing?
Many issues have been causing concern for global investors over the past few months. Front and center is the never-ending European debt crisis. The situation in Greece is not improving, and lately investors have been dumping the bonds of even those countries previously considered to be sheltered from the storm, such as France. In this climate, China’s slowing pace of growth has not been grabbing as many headlines. But it remains a major issue for managers trying to position their portfolios.