The day Treasuries turned? Benchmark yields jumped sharply as markets digested Tuesday’s Fed statement and a weaker 30-year auction. The 10-year note yield rose to 2.29 per cent, a five-month high (Financial Times). US equities ended five days of gains, though not by much: the S&P 500 unofficially closed down 0.12 per cent (Reuters).
Greg Smith’s “toxic” NYT op-ed continued to roil Goldman. A memo to staff emphasized that ’89 percent of you’ believe Goldman provides an exceptional service to clients, despite the rare public attack from a former insider (FT Alphaville). Goldman’s code of silence is nevertheless in tatters (Financial Times). “Lloyd is a big millstone around our neck,” one MD said of Goldman’s chief executive, Lloyd Blankfein.
Muppet controversy: Smith, a VP in derivatives sales, said he had heard five MDs refer to clients as ‘muppets’ in the last 12 months. ‘In the United States “muppet” brings to mind lovable puppets like Kermit the Frog, but in Britain, “muppet” is slang for a stupid person’ (Reuters)
Fitch saddled the UK’s credit rating with a negative outlook. Although it affirmed the current rating at AAA, Fitch warned of ‘very limited fiscal space to absorb further adverse economic shocks in light of such elevated debt levels’ (FT Alphaville).
Iran’s oil output has hit a ten-year low. The International Energy Agency says the country produced 3.38m barrels per day in February, its lowest level since 2002. Sanctions have slowly chipped away at the market for Iranian crude (Financial Times). The IEA also predicted a ‘bumpy ride ahead’ as crude supplies from outside the Opec cartel falter (Bloomberg).
Welcome to the Empire State and Philly Fed surveys. Both have increased for the past four months. The Empire State posted 19.5 in February. Consensus for March is 17.5.
Initial jobless claims in the US. Watch out to see if continuing claims fall again, which would apply the recently unemployed aren’t waiting as long to get new jobs.
Further further reading
– Roger Lowenstein’s penned a long profile of Ben Bernanke and his detractors in The Atlantic. Headline: ‘The Villain’
– Tyler Cowen tries ‘modelling’ Greg Smith’s incentives, at Marginal Revolution