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’Debt talks and the Monday reaction
In a word: muted.
The lack of progress on US debt ceiling talks over the weekend hasn’t caused a spiral of chaos.
Ten-year Treasury yields were up a few basis point early on Monday. Mohammed El-Erian wrote that the US AAA rating was “extremely vulnerable”.
Goldman Sachs makes an expensive typo
The following is the formula for a properly structured warrant tied to Japan’s Nikkei index — which would (we presume) be easy enough to hedge for its issuer:
(Closing Level – Strike Level) x Index Currency Amount / Exchange Rate.
Goldfish, memories and markets
Contrary to popular myth — goldfish have a memory capability that spans months.
But that doesn’t stop Nomura’s chart of the day, titled “markets’ goldfish memory,” from making its point. Assets have very quickly reversed their post-March 11 moves.
Betting on a Nikkei rebound
Well, tomorrow’s Nikkei surely can’t be any worse than today’s.
As FT Alphaville noted on Friday, the iShares MSCI Japan Index Fund (EWJ) is proving an interesting barometer for investor sentiment about where the Nikkei is heading the next day.
Another market overreaction?
It’s probably not the time to say this, given Tuesday’s sharp sell-off, but are some financial markets overreacting to the Japanese earthquake?
From Nomura:
An annual standard deviation for the Nikkei in just three days! For Nomura’s Owen Job,
Nikkei routed
Via Reuters, the Nikkei’s biggest percentage fall since October 2008 — a staggering 10.5 per cent.
Japan update – energy and insurance
The latest from the wires and the FT’s live blog is that the death toll is “set to exceed 1,000″ and that aftershocks of magnitude 6.6 and 5.8 have been detected in northern Japan.
A “nuclear emergency”
Of earthquakes, the BoJ and the ever-resilient yen
As we noted earlier on Friday, there’s nothing quite like a killer earthquake and tsunami to boost a currency — at least, that seems to be the case in Japan where the yen not only recovered after dipping in the wake of Friday’s 8.9-magnitude earthquake and massive tsunami,
What are stock index future curves telling us?
Has anyone else noticed that stock index futures fell into backwardation just after the Lehman crisis?
Well, we for one couldn’t find any commentary on it.
Accordingly we present the time-spreads for the FTSE,
Asia bungees off Europe’s bailout
While Europe’s markets threw themselves into a dead wolf bounce on news of the EU’s bailout on Monday, traders around Asia were contemplating the day’s gains in regional markets.
In a wave of what some fear could be misplaced optimism following overnight news of Europe’s massive rescue plan,
Japan equities: The ‘midget is limbo-dancing’
The hate-fest surrounding Japan appears to have “risen to new highs in recent weeks”, says CLSA’s Damien Kestel in his weekly newsletter Bits & Pieces. In fact, he cites the Oxford (American) dictionary’s word of the year,