Sentiment is mixed this morning after Euro-area finance ministers agreed to further concessions in order to keep Greece in the 17-nation currency block. As of 10:10am EST, the Euro Stoxx 50 was up +0.13%, with most major equity indices in the area climbing slightly higher. Sovereign debt yields are mixed, but spreads to the German bund are down modestly to significantly. The euro was trading -0.35% lower.
In the U.S., stocks are nearly unchanged on the day and the dollar has been climbing higher. The 10yr has been declining overnight and is now down -1bps on the day to 1.652%. In the commodity realm, energy is mostly down, while metals and softs are climbing higher.
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The MorningSnapshot November 20, 2012 I would like to take this opportunity to wish everyone a Happy Thanksgiving. Even though some of us are struggling in these rough economic times, I know we all have a lot to be thankful…
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Equities in the U.S. fell and Treasuries rallied further as concern regarding the federal budget debate and Israeli airstrikes on Hamas wiped out an early rally that was led by technology shares after Cisco reported better-than-forecast earnings. The S&P 500 wound up tumbling -1.39% to 1355.49 on above average volume, with average volume at time (AVAT) using the past 20 days up +12.73%. Oil snapped a two-day losing streak, with Brent rallying +1.35% to $109.71 as of 3:26pm EST, after a leader in Hamas’ militant wing and another Palestinian man were killed by Israeli jets in the Gaza strip. In Europe, the Euro Stoxx 50 finished down -0.81%, led by the U.K.’s FTSE 100 down -1.11%, while sovereign debt yields advanced modestly.
FOMC Minutes Digested
The short and sweet of it is that a number of officials believe the central bank will need to expand its monthly purchases of bonds next year after Operation Twist expires. “A number of participants indicated that additional asset purchases would likely be appropriate next year after the conclusion of the maturity-extension program,” according to the record of the Federal Open Market Committee’s Oct. 23-24 gathering released today in Washington. This language was not surprising to this market observer. The minutes suggest the FOMC may begin outright purchases of around $45B Treasuries per month to maintain the current pace. With respect to Vice Chairman Janet Yellen’s comments on Tuesday regarding linking the Fed’s zero interest rate policy to numerical measurements of unemployment and inflation, the minutes indicated that participants “generally favored” this over the current approach of specifying a calendar date through which rate will remain at depressed levels.
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