May, 2010
Der Bobl ist OK, alles klar?
Well, this was a curiously defensive response from Germany’s debt management office, after Wednesday’s five-year bund auction went badly.
Flashes, via Reuters:
RTRS-GERMAN FINANCE AGENCY SAYS BOBL AUCTION TOOK PLACE IN VERY VOLATILE MARKET CONDITIONS
RTRS-GERMAN FINANCE AGENCY SAYS DEMAND FOR GERMAN SOVEREIGN BONDS IS UNBROKEN ACROSS ALL MATURITIES
Of course,
The tipping point for Europe’s banks
UBS analysts Alastair Ryan and John-Paul Crutchley — of European Central Bank (ECB) as ‘liquidity monster’ fame — are on form in their latest eurozone banking note.
Their theme: The ‘tipping point’ at which banks’ reliance on ECB funding becomes a problem for markets.
Something for the bulls?
Here’s something for stock market bulls to latch on to — the latest OECD Economic Outlook report.
In spite of the turmoil in the eurozone, the OECD has actually revised GDP forecasts for its 31 member countries upwards:
Markets Live transcript 26 May 2010
Markets Live chat transcript for the chat ending at 11:26 on 26 May 2010. Participants in this chat were: Neil Hume, FT Bryce Elder
NHGood morning
NHand welcome to Markets Live
Wednesday Unglück: The Bobled German bond auction
Glancing at the below, the just-published results of Germany’ latest Bundesobligationen (Bobl) auction, you might think all was relatively well:
But as Marc Ostwald over at Monument Securities points out,
Onwards, upwards, forever, European liquidity
On Tuesday, FT Alphaville presented you with some whining banks.
They were complaining about the inexorable rise of Libor and the punitive cost of central bank liquidity. No financial firms, they said,
Sunny side up
We’re not quite sure what’s got into him, but Evolution Securities’ chief economist Ian Harwood seems to be on a one-man mission to shout bullishness from the rooftops lately.
Here’s his latest missive:
Bank of England, corporate bond buyer of last resort
Corporate bond markets are in a febrile state (again).
Enter, the Bank of England (again).
The Bank’s Asset Purchase Facility was created for just such conditions, aimed as it is, at providing liquidity in credit markets.
Miners spend big Down Under, but where’s the outrage?
Amid all the mining industry outrage Down Under about Canberra’s plan to slap a 40 per cent “super profits tax” on resources companies, one is almost tempted to side with the Australian Treasurer, Wayne Swan.
Dear hedge fund investor… May has been a … multidirectional month
It’s not so much the depth of the losses — though in some instances they have been nasty — but rather, their breadth; across strategies, asset classes and managers, that has made May a particularly painful month for much of the hedge fund industry.
Tax evasion, Greek style
On Tuesday, the Greek finance ministry announced it would be “improving operation and transparency in tax administration”, because, as they put it (with some understatement), there’s a “need to improve tax collection mechanisms.”
The interactive eurozone crisis
Cameron Peake over at Inflexionary is a dab hand with Excel.
He’s come up with a Euro Crisis Dashboard — and it’s available for download for free.
You can select up to five eurozone countries at once,
Those secret … summarised … Greek bailout clauses
They were published on Sunday by Bild, but are really hitting headlines now.
The German paper claims to have obtained a copy of the €80bn eurozone bailout agreement for Greece — and is “exposing”
Cosmic European commercial paper
There’s been much focus on surging Libor of late, but there’s another (sky-high) money market indicator to focus on.
The rate for 30-day European Commercial Paper (ECP) has surged in recent days, jumping 14 basis points this week to 48bps.
Further reading
Elsewhere on Wednesday,
- Lights, camera… Drachmark!
- Too bad we don’t have GDP futures.
- What hedgies can teach about tail risk.
- Planet Earth’s biggest bear.
- AAAs are gone, but demand for them hasn’t.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Grasshoppers and ants – a modern fable
Everybody in the west knows Aesop’s fable of the grasshopper and the ant. The grasshopper is lazy and sings away the summer,
Snap news
Breaking pre-market news on Wednesday,
- BP outlines ‘top kill’ plan for Gulf of Mexico oil response – statement.
- Nationwide reports underlying annual pretax profits of £212m – statement.
- Burberry planning capital expenditure of £130m in the coming year – statement.
‘It is forbidden to write or enter into currency derivatives…’
FT Alphaville’s resident germanophone Joseph Cotterill has tracked down the Finanzmärkte Diskussionspapier relating to Germany’s newest and most far-reaching draft law to ban all forms of naked short selling.
RBS on central banks’ underwater EUR positions
RBS FX strategist Alan Ruskin on Tuesday issued an interesting piece of research/chart porn regarding ‘the extent to which existing central bank Euro reserve positions are already under water.’ The short answer to which is,
‘Berlin has decided to extend Leerverkaufsverbot’
Germany on Tuesday stepped up its campaign against short selling, and according to the Handelsblatt, is moving forward at speed (via Google Translate):
The federal government wants to ban naked short selling of shares,
People Column peeked through the herbacious borders…
…at the opening of the Chelsea Flower Show on Monday night.
And here is what they saw.
(Click below for the full slide show)
Competition
A signed copy of Fools Gold (updated with new preface and afterword) by the FT’s Gillian Tett on offer for the best caption to the above picture.
Libor life-savers?
Is that an ECB rate cut on the horizon? Markets rallied somewhat on Tuesday, on talk of an intervention to the tune of a 50bps slice off the main refi rate. An ECB spokesman declined to comment on the speculation.
Would you like some wine with that chocolate bond?
Here on FT Alphaville, we’re no stranger to the world of arty private equity funds and wine investments, and Bowie bonds are old hat. But chocolate bonds – well, that’s a new one.
On Tuesday, GorkanaPR reported that Hertfordshire-based upmarket chocolate manufacturer Hotel Chocolat is planning a tasty fundraising:
ING’s pictorial guide to the market
Here’s fifty-nine entertaining slides from ING on the state of the global recovery:
Click on the graphic for the full tour.
Rule 48 rides again
The NYSE again invoked Rule 48 on Tuesday, having last brought it out on May 20:
For reference, the NYSE Rules explain how it works:
In the event that an extreme market volatility condition is declared with respect to trading on or through the facilities of the Exchange,
If first you don’t succeed…
…try, try again.
Breaking on Bloomberg Tuesday lunchtime, another German attack on the wolfpack:
GERMANY PROPOSES NAKED SHORT SELLING BAN OF ALL GERMAN STOCKS
GERMANY PROPOSES BAN OF SOME EURO REGION
Beware the ides of money funds, Libor
Libor laments notwithstanding, this was a big jump on Tuesday:
RTRS-LIBOR THREE-MONTH DOLLAR RATES FIX AT 0.53625 PCT VS 0.50969 PCT ON MONDAY -BBA
11:56 25May10 RTRS-LIBOR THREE-MONTH EURO RATES FIX AT 0.63875 PCT VS 0.63438 PCT ON MONDAY -BBA
11:56 25May10 RTRS-LIBOR THREE-MONTH STERLING RATES FIX AT 0.70813 PCT VS 0.70188 PCT ON MONDAY -BBA
Ouch.
CDS report: Geopolitical risk to the fore
After a tepid start to the week yesterday, the credit markets today showed the volatility we have become accustomed to. Long-standing concerns over eurozone sovereigns and their fragile banking systems combined with fresh geopolitical turmoil to push spreads wider.
China, A-shares and double-dip recessions
A big swing up – and back down – for Chinese stocks at the start of the week spoke more eloquently than any analyst could about the market’s extreme sensitivity to any hint of price-curbing measures in China’s overheating property market.
Markets Live transcript 25 May 2010
Markets Live chat transcript for the chat ending at 11:30 on 25 May 2010. Participants in this chat were: Neil Hume, FT Bryce Elder
NHgood morning
NHwell I guess it’s a good morning