Recap 12-10-13

Commentary:

Courtesy of FTA, Investment Grade EU corporations are able to borrow at a much lower rate in the bonds market than through banks:

Notable:

  • UK RICS House Prices Bal rose to 58 vs 60 exp and 57 prev
  • AU Home Loans rose 1.0% MoM as exp vs 4.4% prev
  • Australia Business Confidence was stable at 5
  • China IP rose 10.0% vs 10.1% exp and 10.3% prev
  • China Retail Sales rose 13.7% vs 13.2% exp and 13.3% prev
  • Industrial production in China was 10% y/y versus 10.1% expected. Fixed asset investment was 19.9% versus 20% expected. Retail sales y/y increased 13.7% versus 13.2% expected.
  • USDA Ag report End Stocks:
  1. Corn: 1792M vs 1854M exp and 1887M prev
  2. Soybean: 150M vs 155M exp and 170M prev
  3. Wheat: 575M vs 560M exp and 565M prev

ManPower survey: U.S. employers report a seasonally adjusted Net Employment Outlook of +13%. This represents the strongest Outlook reported in Quarter 1 since 2008 when the Outlook was +16%.

Europe is close to a bank union deal. “Berlin is showing openness to a single Eurozone rescue fund financed by bank levies, as long as there are clear safeguards that ensure senior creditors and national resolution funds shoulder the costs before European funds or taxpayers do.” FT

Nearly 2/3 of Japanese companies expect additional stimulus from the BOJ during H1:14. Many think Kuroda will take action to offset the upcoming sales tax hike. Reuters

The FHFA is increase its G-fee by an average of 10bps for new loans, with the goat of contracting the GSEs’ market share. Change will be implemented in March 2014. JPM thinks that this change makes MBS less callable, and is worth up to 14 ticks in value for 30-years, with most of the benefit concentrated in 4s and above

Upcoming Data:

  • Tue: Japan Machine Orders
  • Wed: Germany CPI, Australia Employment
  • Thu: US Jobless Claims, Retail Sales
  • Fri: US PPI,
  • Mon: Japan Tankan, China Flash Mfg PMI, EU PMI, US Empire Mfg, Prelim PMI
  • Tue: UK PMI, GermanyZew, US CPI, NAHB Housing Index, Japan Trade Balance
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