SocGen Presents The "Toxic" Difference Between QE In The US And Japan

In the US, easy central bank policy leads to greater corporate bond issuance and leverage, which in turn result in companies buying back their own equity - and to that extent QE is now residing on individual company balance sheets. In contrast, in Japan the BOJ simply buys Japanese equities directly. This difference is important

DV01 Update: A 1% Rise In Yields Will Lead To $2.1 Trillion In Govt Bond Losses

The effective duration on Bank of America’s global government bond index climbed to an all-time high of 8.23 in 2016, from 5 when it began in 1997. A one-percentage point increase in interest rates equates to about $2.1 trillion in losses for global investors, based on a Bloomberg Barclays sovereign-debt index.

Tepid Demand For 2Y Paper: Bid-To-Cover Slides, Primary Dealers Hold More Than Half

Following hot on the heels of Austria's record 70 Year bond issue, there was some concern if today's 2Y Treasury auction would not fall flat on its face when the results printed at 1pm. However, it appears that just as there was demand for duration, so there was interest in "safety" paper, and as a result, the just concluded 2Y auction priced at 0.855%, 0.1bps inside the When Issued, which was also the highest yield on 2Y paper since May.

Austria Sells €2 Billion In 70 Year Bonds, Pushes Global Duration Risk To Record High

The latest evidence of the unprecedented scramble for yield and duration came yesterday when it was revealed that Austria would join the rest of the Eurozone in selling ultra-long dated debt in the form of 70 Year bonds. It didn't take long to find willing buyers, and moments ago Bloomberg reported that this offering has just priced to yield 53 bps more than that on the February 2047 security.

Monte Paschi Plunges As Much As 39% On Debt-For-Equity Fears After Surging In Past Week

After a furious rally in the past week on hopes that Italy's oldest, and most insolvent, bank, Siena's Monte Paschi has turned the corner and would return to profitability while outside investors would finally help it in its seemingly endless quest to find $5 billion in outside capital, today BMPS shares plunged after first opening limit up in what can only be characterized as a roller coast market.

US Futures, Global Stocks, Metals Rise On Economic Confidence, Upbeat Earnings

European, Asian stocks and S&P futures are all up again in early trading, a repeat of the Monday session, buoyed by a generally upbeat corporate earnings season, rising economic confidence and signs of improvement in the world’s biggest economies. After Charles Evans' hawkish comments on Monday, the market is now pricing in a 71% chance of a rate increase this year, up from 68% last week.

Venezuela Escapes Bankruptcy… But Oil Production Continues To Plunge

Venezuela just dodged a bullet, pulling off a last minute bond swap with creditors. The deal only buys Venezuela a little bit of breathing room, and a default at some point next year or the year after is not out of the question. Either way, the South American OPEC nation’s oil production is falling and will only continue on a downward trajectory.

AT&T Purchase Of Time Warner Greeted By Skepticism On Wall Street, Scrutiny In Congress

15 years after it was part of one historic merger, Time Warner is getting bought again, and while the current deal is roughly half the size of AOL's historic $164 billion acquisition of Time Warner in 2000 it's still a big enough deal that it's drawing attention on the campaign trail from both candidates, and to generate millions in revenues for Wall Street banks eager to sell the $40 billion in debt needed to fund the deal.

Calm Before The Storm - Coming Out Of The Voldrums

Implied volatilities - the market's best guess at short-term-future uncertainty - collapsed last week across every asset class from FX to equity. For now, as Bloomberg's Richard Breslow notes, markets seem comfortably calm amid the real storm of macro, micro, and geopolitical risks, but many of the same 'calm' markets are at critical technical levels putting them all "in play."

Global Stocks Jump On Mega Merger Monday, Buoyed By Earnings, PMIs, Politics

Global stocks jumped around the globe, with Europe's Stoxx 600 and US equity futures rising more than 0.5% on a surge in merger announcements over the weekend including the $85 billion mega takeout of AT&T for Time Warner, the $6.4 billion acquisition of B/E Aerospace by Rockwell Collins, the $2.7 billion deal targeting Genworth by China Oceanwide and the just announced $4 billion purchase of Scotttrade by Ameritrade.