Showing posts with label import prices. Show all posts
Showing posts with label import prices. Show all posts
Thursday, October 2, 2008
Monday, June 30, 2008
European Central Bank raises rates ahead of Fed
Treasury 10-year notes rose after the National Association of Purchasing Management-Milwaukee manufacturing index dropped to its lowest since October 2001 and stocks of several financial firms fell.
Citigroup Inc., Merrill Lynch & Co. and Lehman Brothers Holdings Inc. were among the firms that declined. The purchasing association's monthly index of regional manufacturing fell to 39, its fourth straight month below 50. A reading lower than 50 means the number of manufacturers that said business deteriorated was greater than the number saying it improved.
Treasuries earlier fell, extending the biggest quarterly decline since 2004, as inflation in the euro region rose to the highest in 16 years and oil advanced above $143 a barrel.
The retreat pushed 10-year yields up from a three-week low after a European Union report showed the rate of euro-region inflation climbed to 4 percent, bolstering the case for the European Central Bank to raise rates. Why are they ahead of us?
Crude oil for August delivery rose as much as $3.46, or 2.5 percent, to $143.67 a barrel in electronic trading on the New York Mercantile Exchange. It reached $142.99 a barrel on June 27 after the Fed left interest rates unchanged at 2 percent. The market continues to struggle with what to do with the rise in oil.
Citigroup Inc., Merrill Lynch & Co. and Lehman Brothers Holdings Inc. were among the firms that declined. The purchasing association's monthly index of regional manufacturing fell to 39, its fourth straight month below 50. A reading lower than 50 means the number of manufacturers that said business deteriorated was greater than the number saying it improved.
Treasuries earlier fell, extending the biggest quarterly decline since 2004, as inflation in the euro region rose to the highest in 16 years and oil advanced above $143 a barrel.
The retreat pushed 10-year yields up from a three-week low after a European Union report showed the rate of euro-region inflation climbed to 4 percent, bolstering the case for the European Central Bank to raise rates. Why are they ahead of us?
Crude oil for August delivery rose as much as $3.46, or 2.5 percent, to $143.67 a barrel in electronic trading on the New York Mercantile Exchange. It reached $142.99 a barrel on June 27 after the Fed left interest rates unchanged at 2 percent. The market continues to struggle with what to do with the rise in oil.
Tuesday, May 13, 2008
Treasuries and Euro
U.S. Treasuries fell, pushing two-year yields to the highest level in a week, as a bigger-than-forecast increase in a measure of retail sales bolstered speculation the Federal Reserve will keep interest rates unchanged next month. Two-year notes led declines as traders bet the Fed's seven rate cuts since September will help the economy emerge from the biggest housing slump since the Great Depression. Import prices rose more than expected last month as the dollar set a record low against the euro.
The yield on the 30-year bond rose 7 basis points to 4.61 percent as oil reached $126.98 a barrel, a record high. Excluding autos, retail sales increased 0.5 percent in April, after a 0.4 percent climb in March, the government said. Futures on the Chicago Board of Trade show a 92 percent chance the Fed will hold its target lending rate at 2 percent on June 25, up from an 86 percent likelihood yesterday. The balance of bets is for a cut of a quarter-percentage point. Traders also see a 43 percent chance the central bank will lift the benchmark rate to 2.25 percent by year-end.
The yield on the 30-year bond rose 7 basis points to 4.61 percent as oil reached $126.98 a barrel, a record high. Excluding autos, retail sales increased 0.5 percent in April, after a 0.4 percent climb in March, the government said. Futures on the Chicago Board of Trade show a 92 percent chance the Fed will hold its target lending rate at 2 percent on June 25, up from an 86 percent likelihood yesterday. The balance of bets is for a cut of a quarter-percentage point. Traders also see a 43 percent chance the central bank will lift the benchmark rate to 2.25 percent by year-end.
Friday, February 22, 2008
January Import prices soar 13.7%
Inflation, that aint inflation thats just a price adjustment. Yes, we are getting a taste of the value of the dollar. For the past few years the US public has enjoyed our imports from China, the inexpensive and an unexhaustable supply of cheap stuff that we can charge to our credit cards.
Well the flood of US dollars to cover this market has led us to our first rounds of "Price Adjustments." Economists normally call this inflation, and for the most part the backpeddling of the Fed announcing that it could be a little worse that we thought, is probably one of the biggest understatements of the Year.
Looking at Import prices alone, we can see that the January surge of 13.7% is the largest one time price increase since the government started keeping track in 1972.
Lending rates.
US Treasuries are steady this morning, with the 10-yr hovering in the high 3.70's. There is no scheduled economic news, aside from stock markets in Europe and Asia falling overnight. Mortgages, on the other hand, are slightly worse in price after a week of volatility. Prices were helped yesterday by a weak Philly Fed Index result, but lagged Treasury rates. Investor appetite for risk, which includes mortgages, remains low.
Fed funds futures on the Chicago Board of Trade indicate a 94 percent chance policy makers will reduce the target rate for overnight lending between banks to 2.5 percent at its March 18 meeting, compared with odds of 66 percent a week ago. The chance of rates being cut to 2.25 percent are 6 percent, down from 34 percent last week.
Fed policy makers indicated borrowing costs need to be kept low ``for a time". Some foresaw raising interest rates, possibly at a ``rapid'' pace, once the economy recovers. The central bank cut borrowing costs by 125 basis points to 3 percent last month, the fastest easing in almost two decades.
Well the flood of US dollars to cover this market has led us to our first rounds of "Price Adjustments." Economists normally call this inflation, and for the most part the backpeddling of the Fed announcing that it could be a little worse that we thought, is probably one of the biggest understatements of the Year.
Looking at Import prices alone, we can see that the January surge of 13.7% is the largest one time price increase since the government started keeping track in 1972.
Lending rates.
US Treasuries are steady this morning, with the 10-yr hovering in the high 3.70's. There is no scheduled economic news, aside from stock markets in Europe and Asia falling overnight. Mortgages, on the other hand, are slightly worse in price after a week of volatility. Prices were helped yesterday by a weak Philly Fed Index result, but lagged Treasury rates. Investor appetite for risk, which includes mortgages, remains low.
Fed funds futures on the Chicago Board of Trade indicate a 94 percent chance policy makers will reduce the target rate for overnight lending between banks to 2.5 percent at its March 18 meeting, compared with odds of 66 percent a week ago. The chance of rates being cut to 2.25 percent are 6 percent, down from 34 percent last week.
Fed policy makers indicated borrowing costs need to be kept low ``for a time". Some foresaw raising interest rates, possibly at a ``rapid'' pace, once the economy recovers. The central bank cut borrowing costs by 125 basis points to 3 percent last month, the fastest easing in almost two decades.
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