Archive - Feb 9, 2011 - Story

Futures appear sluggish this AM, bucking the trend from the recent sessions. US rail shipping data (AAR) reporting that intermodal traffic up 7.4% over 2010. Confidence numbers for small businesses and economic optimism printed better than expected yesterday while the weekly consumer confidence number disappointed. The market's shrugged off the PBOC rate hike initially, but with more speculation of actions to come and further price rises in commodities, it appears time for a breather. 11.3% gain last week. Fed Chairman Ben Bernanke will speak today at the House Budget Committee at 10AM. Expect comments focused on fiscal policy rather than on monetary concerns as he presented last week. We look ahead to tomorrow for initial jobless claims which may add a new perspective on last week's unemployment numbers.

It's all Fedspeak after this morning's news of a drop in mortgage applications...Today is the last POMO of the current schedule in which $6-8 billion of bonds due 02/15/2015 – 07/31/2016 will be monetized. Tomorrow, the new monthly POMO schedule will be released at 2:00pm. Look to see if the Fed will be buying more than the usual fare of 17-30 bonds due to ongoing massacre at the long-end or if, instead, Bernanke is happy with letting the 30 Year plunge.

One of the bigger news this morning is the so far unconfirmed report that Bundesbank President Axel Weber, who has been in the running to replace Jean Claude Trichet, has decided against an ECB future, and instead wants to make money at Deutsche Bank. The sudden about turn in the process has left many wondering why so late in the process, and just what about the ECB is it that makes Weber leery of affixing his fate to the central bank without a unified bond printing facility. From BusinessWeek: "Deutsche Bundesbank President Axel Weber will step down and wants to join Deutsche Bank AG, Deutsche Presse-Agentur reported today, without saying where it obtained the information."

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 09/02/11

With a hike discounted and real yields still in very negative territory, I expected a fade of any initially bearish reaction, which is what the market provided today.