FT markets round-up: “Disappointing US housing data and weaker-than-expected results from the largest luxury homebuilder drove down stocks in the sector while broader markets sold off after the release of the FOMC minutes. Main indices fell sharply giving up some of the recent gains after reaching fresh multiyear highs during the previous session. The minutes from the FOMC meeting revealed that “many” officials were concerned about the costs and risks of further asset purchases, as the Fed buys securities at a pace of $85bn a month. Markets which started the day lower, sold off after the release of the minutes with the benchmark S&P 500 index closing down 1.2 per cent at 1,511.95.” (Financial Times) Read more
Here’s the passage from the January FOMC minutes that is getting the most attention (emphasis ours, and we separated it into multiple pars for an easier read):
Several participants emphasized that the Committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved. For example, one participant argued that purchases should vary incrementally from meeting to meeting in response to incoming information about the economy. Read more
Ay ay ay! Gold is approaching a death cross and all sorts of other commodities are looking nasty too.
From a terrific post by Andy Harless:
Machismo is a type of commitment mechanism. Read more
Eurobank recently lowered the over-collateralisation (OC) of its second covered bond programme to the bare minimum allowed by Greece’s covered bond law. Avid covered bond-watchers (there must be a handful of you out there) will know of course, that specially designed legal frameworks are one of the big perks of the covered bond structure – along with juicy benefits like an overstuffing of assets and the dual recourse nature of the centuries-old debt instruments. Read more
Cheery chap, Tim Morgan, chief economist at money broker Tullett Prebon. Here’s a few charts to warm us all up on a cold February day…
Live markets commentary from FT.com
Kloppers to be replaced by inside geologist || €3.5bn buyout plan for France’s Elior || Italy’s centre-left woos Monti || Bulgaria’s government resigns || Dell shareholders maintain criticism of buyout after earnings fall || Isle of Man tax haven horizon || China FDI falls again || JGB dog that didn’t bark || Markets Read more
Here’s the dovish BoE minutes that started sterling sliding (click through for the pdf): Read more
Don’t go messing with the kiwi! The governor of New Zealand’s central bank, Graeme Wheeler, was pretty clear in a speech earlier today:
We believe the exchange rate is significantly over-valued relative to what would be sustainable long term in the absence of sizeable increases in the terms of trade and productivity.
The weaker yen hasn’t done much for Japan’s exports so far, with preliminary data out today showing another record in Japan’s trade deficit. Exports were 6.4 per cent higher, year-on-year, in January and failed to raise as much as imports (up 7.3 per cent). This brought the trade deficit to Y1.63bn.
Societe Generale say not to worry yet, however. Firstly, those figures are not seasonally-adjusted. Month-on-month seasonally-adjusted numbers show the trade deficit shrank from Y678.9bn in January from a revised Y783.8bn in December. Read more
Elsewhere on Wednesday,
– Dematerialising gold.
– And yes, gold miners still suck.
– Ageing and productivity. Read more
Asian markets rise || Kloppers to be replaced by inside geologist || €3.5bn buyout plan for France’s Elior || Italy’s centre-left woos Monti || Dell shareholders maintain criticism of buyout after earnings fall || Isle of Man tax haven horizon || China FDI falls again || JGB dog that didn’t bark Read more