Posts from Friday Jun 21 2013

The Weekender

FURTHER WEEKEND READING

- A big roundup of charts from Matthew Boesler. Read more

State-contingent policy works best when you know the states on which policy is contingent

James Bullard weighed in this morning explaining his dissent to the FOMC statement on Wednesday, and now he has expanded on his thoughts in an interview with Neil Irwin at Wonkblog:

N.I.: So is your objection and reason for dissenting that you disagree with the pathway for policy that was laid out, of ending QE when unemployment hits about 7 percent and raising short-term rates when unemployment is about 6.5 percent or lower? Or is it that you disagree that now was a good time to lay that out? Read more

Clock still running on tin hat time, US 10-year treasury yields edition

Now north of 2.5 per cent:

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The EM “sell-off”, chart du jour

Courtesy of RBC Capital Markets on Friday:

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Introducing “ISDA risk” – it’s like basis risk, but more annoying

How many different types of risk can you name?

Operational risk, market risk, liquidity risk, legal risk, credit risk, etc. Now, let’s add “Isda risk” (pronounced Izzz-dah risk, it has the added benefit of making one’s risk manager sound like a rapper, which hopefully we all can agree is hilarious):

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A gold margin call

From Ben Traynor’s commentary at BullionVault on Friday:

CME Group, which operates the New York Comex exchange on which gold futures are traded, announced yesterday it is increasing margin requirements on gold trading by 25% to $8800 per 100-ounce contract. The new initial margin requirement will come into effect after close of trading today. “That is definitely affecting gold,” says Joyce Liu, investment analyst at Phillip Futures in Singapore. “For those who cannot put out margin calls on time, they will be squeezed out even when they don’t want to get out.”

Worth pondering is how all of this now affects the “cash-for-gold” trade. Read more

Markets Live: Friday, 21th June, 2013

Live markets commentary from FT.com 

ETF providers take the sell-off heat

‘Twas not a good day for anyone in the market on Thursday.

But…

It was a particularly bad day for the listed ETF/fund providers:

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The (early) Lunch Wrap

Chinese interbank rates eased after reports of central bank support || The ESM has been authorised to ‘directly recapitalise’ eurozone banks || Bond market sell-off causes stress in $2tn ETF industry || Oracle’s revenue growth stagnated for another quarter || The IMF has warned eurozone creditors of gaps in financing Greece’s bailout || Softbank’s chief executive revealed the ambition behind its $21.6bn bid for Sprint Nextel || UK prosecutors alleged that former Libor trader Tom Hayes conspired with employees at eight banks and interdealer brokers || Markets || FTAV’s latest Read more

Further reading

Elsewhere on Friday,

- Profits without production.

- Who’s leaving commodities?

- Patent trolls will not be tolerated. Read more

The London 6am Cut

Chinese interbank rates eased after reports of central bank support. The one-day repo rate receded 3.84 percentage points to 7.9 per cent, its biggest drop since 2007, while the seven-day rate fell 3.51 percentages points from the record high it set on Thursday (Bloomberg).

Fed casualties watch: Pimco’s Total Return Fund is now down 2.2 per cent for the year, the worst performing of large US total return funds (Bloomberg); Having fallen below $1,300, gold’s 23 per cent slump this year is on course to be its worst since 1981 (Bloomberg); Thursday’s bond sell-off saw ETFs’ discounts to underlying asset values widen sharply, with cash redemptions halted for some (Financial Times). Read more