Posts from Thursday Apr 19 2012

The Closer


Equity markets fell pretty much everywhere today, though Spain in particular stood out as the IBEX decline 2.4 per cent and now close to its crisis era lows. There was a strong auction of Spanish sovereign debt earlier in the day, but it was followed a series of disappointing US economic indicators, including another jump in initial unemployment claims. (Financial TimesRead more

Flies in the Fed’s ointment

Yep, nearly time to start talking about the next FOMC meeting, a two-day affair that begins this Tuesday.

Any big decisions regarding further quantitative easing are more likely to be taken later, closer to when Operation Twist is scheduled to end in mid-June. (Expect to see more stories using the “wait-and-see mode” formulation.) But on the schedule is the second iteration of the individual participants’ federal funds rate projections, and that could be interesting. Read more

Rights and wrongs, Deutsche Bank edition

Choose your story.

From the WSJ just after 4pm London time: Read more

Shamu in the swimming pool

Hedge funds are not happy.

Don’t everyone run to their defence at once now. Read more

This correlated world

Two heat maps from HSBC.  The first is a typical correlation matrix across a range of assets in the world before Lehman collapsed. The second is post-Lehman. Red indicates strong positive correlation and blue indicates strong negative correlation. Greens and yellows appear when correlations are close to zero. Click each map to enlarge.

 Read more

A Bobcession on bonuses (or daylight bobbery)

‘In the usual way’, ‘strength of opinion’, etc.

Barclays, ahead of its April 27 AGM: Read more

The curve trade

A “tempest in a teapot. That’s how JP Morgan CEO Jamie Dimon described the fuss caused by the bank’s Chief Investment Office apparently entering into large credit trades. It may well be teapot-sized, for him. The point for some hedge funds is that even if it was a swimming pool, you’d feel a bit cramped if Shamu joined you for your morning laps.

Which is to say that, for those actually trading credit indices, the thing that is such a big deal is whether the trading behaviour of JP Morgan’s CIO distorted the market. Less of a big deal is whether JP Morgan is going to land itself in trouble if the trades aren’t actually hedges but proprietary bets, hence go against the Volcker Rule. Read more

Eurozone credit contagion, in 8 easy steps

As well as warning that eastern Europe has the most exposure to a eurozone credit freeze, the IMF has given us a handy, visual guide to eurozone contagion (click to enlarge):

Market linkages diagram -- source: IMF  Read more

Markets Live transcript 19 Apr 2012

Live markets commentary from 

The (early) Lunch Wrap

Good morning, New York…


Spanish bond auction

From Reuters:

09:39 RTRS – SPAIN SELLS 1116 MLN EUROS IN 2014 BONDS Read more

Spain’s ever-growing, non-performing loans

From the Bank of Spain on Wednesday, with impeccable timing:

Spain's non-performing loans to February 2012 - Bank of Spain
(Click to expand) Read more

This discount mobile subscription is available for Dutch citizens only

By Matt Steinglass, the FT’s Netherlands correspondent

The last thing Eelco Blok, chief executive of KPN, needed this week was an unforced error. Read more

Further reading

Elsewhere on Thursday,

– Drilling in the dark zoneRead more

The 6am Cut London

A $2.6tn European bank deleveraging could jeopardise financial stability, says the IMF. The fund warned that banks’ plans to shrink their assets by almost 7% over the next 18 months could hit economic growth, reports the FT. The fund has so far raised $320bn in extra ‘firepower’ funding after Poland and Switzerland made commitments on Wednesday, reports Reuters.

Asian stock markets fell ahead of debt auctions from Spain and France, says BloombergRead more

Overnight markets: Down

Asian shares fell and South Korea’s won dropped before Spain and France sell 13.5bn in debt. The yen weakened for a third day as Bank of Japan Governor Masaaki Shirakawa pledged to continue monetary easing, says Bloomberg. The MSCI Asia Pacific Index (MXAP) slipped 0.3 % as of 1:17 p.m. in Tokyo, led by declines in Japanese equities.

Asian markets Read more