Treasury prices slip after upbeat economic reports

One Minute Macro Update
Europe : EURIBOR-OIS has fallen back below 40bp as EURIBOR drops below 100bp and SOVXWE trades back towards 200bp. We still believe the European periphery situation will continue to deteriorate and will eventually overtake the Bullish tone the market has adopted over the past few weeks. UK December Manufacturing PMI 58.3 v 57.2E as M4 growth printed at -0.8% MoM v +0.7% prior. YoY -1.4% v -0.8% prior. The BOE has reportedly been targeting 5% M4 growth to avert Recession. German employment figure...

Treasurys flat after Fed details Dec. meeting
Treasury prices are mostly flat after the Federal Reserve released details from its meeting last month. The price of the 10-year Treasury note edged down 3.1 cents per $100 invested Tuesday afternoon. The note's yield was unchanged at 3.34 percent. Bond traders looked to the Fed minutes for any signs that officials might curtail a $600 billion bond-buying program given a string of stronger economic reports. Fed members voted 10 to 1 to keep the plan in place through June. The goal is to encourag...

Why Investors Should Pay No Heed to Bill Gross's 'New Normal'
Bill Gross, the leading proponent of the "New Normal" -- the idea that stocks will return just 3% a year for the foreseeable future -- has been wrong over and over again. So why does anyone pay attention to his predictions? Stocks have been a fantastic place to be since the start of 2009. In that year, the S&P 500 stock index rose 23%, and in 2010 it added another 13%. But in a February 2009 interview I did with Gross for BloggingStocks, he moaned about how stocks were a terrible place to ...

The Most Interesting Paragraph In The FOMC Minutes
Email Sent! You have successfully emailed the post. It concerns the rise in long-bond rates, and what it shows is that nobody really knows much of anything. It sounds like your typical CNBC octobox. It's the Deficit! It's growth! It's portfolio re-allocation! Interest Rates at intermediate and longer maturities rose substantially over the intermeeting period, while credit spreads were roughly unchanged and equity prices rose moderately. Participants pointed to a number of factors that appeared ...

Fed Saw Economy Needing Bond-Buying Program
Federal Reserve officials stuck with the pace of their $600 billion Treasury Bond-buying program last month because The Economy wasn't improving fast enough to make a noticeable dent in Unemployment. Spending by consumers and businesses had improved heading into the final month of 2010, and Congress was on the verge of enacting a tax-cut package that would bolster the economy, Fed officials said. That made them more confident the economic recovery would gain momentum, according to minutes of the...

Richard Barrington: Ireland Is the Latest Cautionary Tale for the U.S.
Ireland went through some nervous moments last week as yields on its Debt soared due to concerns over the country's financial solvency. Could this kind of thing happen to the U.S.? Whether Ireland pulls out of its Debt problem with the help of aid from other countries or Austerity programs at home, there are some important lessons for the U.S. The price of Debt A few other countries, most notably Greece, have been down this road already this year. A national dependence on Debt escalates to th...

Federal Reserve to Keep on Easing
The Federal Reserve today released the minutes from its Dec. 14 meeting to determine just how much money it would create out of thin air as part of its continuing effort to stimulate The Economy. The Fed determined that labor demand was increasing but not enough to stave off high levels of Unemployment. Industrial production increased, as did Consumer Spending, but the Housing Market remained a tremendous threat to prosperity. Stock prices rose, an outcome the Fed would deem as desirable, as t...

Stocks push higher
NEW YORK (CNNMoney) -- U.S. stocks pushed higher at the open, building on the previous session's optimism, as investors await key reports on factory orders and auto sales. The Dow Jones industrial average (INDU) rose 27 points, or 0.2%; the S&P 500 (SPX) inched up 1 point, or 0.1%; and the NASDAQ (COMP) added 9 points, or 0.3% at the get-go Tuesday morning. Email Print Comment Stocks are coming off a rally on Monday, when the Dow closed at a fresh two-year high after Manufacturing and const...

Interest rates: Fed sticks with $600 billion plan to lower interest rates
Interest rates and ongoing Unemployment keep Federal Reserve officials firm in their plan to buy back $600 billion in Treasury Bonds....

Ring in the New Year
Get alerts when there is a new article that might interest you. As readers of these piece already know, I possess neither a sophisticated model of the U.S. economy such as the ones available to the bright sparks whose mis-measurement of risk almost brought down the Financial System, nor a crystal ball. All I can offer with any confidence is the observation that the data suggests we will open for business in the new year in better shape than we were at the beginning of 2010. Investors are countin...

11 Key Numbers to Watch in 2011
There is a growing economic spectator sport in this country: When will the U.S. economy get up off the mat and turn the corner? The answer is of more than casual interest to the 308,745,538 residents of our data-driven nation. Here are 11 key numbers you should be watching: 1. Consumer Confidence . The most widely watched measure of how consumers feel about The Economy is provided each month by the Conference Board, a business policy group. Would you believe that its confidence index stood at ...

Stocks recovery rally to continue
NEW YORK (CNNMoney) -- Stocks have had a great run since bottoming out nearly two years ago, and Wall Street experts anticipate 2011 to be no different. Investment Strategists and money managers expect the S&P 500 to rise 11%, on average, according to an exclusive CNNMoney survey. In fact, not one of the 32 experts surveyed by CNNMoney think the S&P 500 will decline this year. Email Print Comment "Everything seems to be in place for the Stock Market to rise," said Weeden &...;

Goldilocks in China!? Euro Zone CPI heats up
Soft landing hopes in China after the moderating Manufacturing indices over the weekend helped to send the Shanghai index higher by 1.6% and that set another positive tone for the rest of the region and that spilled over into Europe. However, most European bonds are trading lower after Dec Euro Zone CPI rose 2.2% y/o/y, above expectations of 2% and the highest since Nov ’08. The ECB’s explicit Inflation target is 2%. The bond reaction to the Inflation data offset a weaker than expe...

Fed: Economy Still Weak Despite Improvements
WASHINGTON (By Pedro da Costa and Mark Felsenthal) - Federal Reserve officials in December felt the U.S. Economic Recovery was still weak enough to warrant monetary support despite growing signs of strength, Fed meeting minutes released on Tuesday showed. Wall Street Economists have been busy revising up their forecasts for Economic Growth in recent weeks on the back of signs showing business activity and Consumer Spending picking up steam. But the Fed's policy-setting panel, which at its Dece...

Economic Outlook: A rising challenge
Published: Jan. 4, 2011 at 9:53 AM Expect to see the media in Asia, the United States and Europe pay more attention to Inflation this year. That's right: There will be an inflated focus on Inflation this year, especially if a global recovery marches along as policymakers order it to do. Inflation is that dicey counter-transference, if you will, the way economic success bites back at the hand that feeds it. It is supposed to be a symptom of the ebb and flow of commerce, rising when demand is high...

Wall Street leaps in first session of 2011
By Caroline Valetkevitch NEW YORK | Mon Jan 3, 2011 2:54pm EST NEW YORK (Reuters) - Wall Street stocks surged more than 1 percent as the new trading year kicked off on Monday and the rally of late 2010 resumed on encouraging signs about the Economic Outlook and a seasonal effect. Stocks got a boost from the "January effect" when fund managers are no longer engaged in year-end window dressing and instead focus on stocks they find attractive. The NASDAQ 100 hit a 10-year high, driven largely by...

"Every Tool In The Tool Kit"
I meant to write about this end of year markedly ridiculous Obama Administration puff piece by Ezra Kiein before, but work and College Football got in the way. I just will point to one part to give you the flavor of the nonsense: In housing [. . .r]ather than fundamentally reform the market, the administration and Federal Reserve focused on backstopping it. Buying a house in 2009 and 2010 was little different from 2004 and 2005. What had changed was the Fed using every tool in its toolkit -- a...

Treasuries tread water ahead of Fed minutes
NEW YORK (CNNMoney) -- Treasury prices were little changed Tuesday, as traders awaited minutes from the Federal Reserve's latest policy meeting. A stronger-than-expected report on factory orders did little to move the market out of its rut. Email Print Comment Meanwhile, sales figures from major auto companies will be released throughout the day. Economists polled by Briefing.com expect auto sales to have edged lower. With no auctions scheduled, the closely-watched jobs report on Friday is re...

Fed minutes: Economy needs bond-buying program
Federal Reserve officials stuck with the pace of their $600 billion Treasury Bond-buying program last month because The Economy wasn't improving fast enough to make a noticeable dent in Unemployment. Spending by consumers and businesses had improved heading into the final month of 2010, and Congress was on the verge of enacting a tax-cut package that would bolster the economy, Fed officials said. That made them more confident the economic recovery would gain momentum, according to minutes of the...

Moving Beyond Fannie and Freddie
The new Congress, with a Republican House and a much narrower Democratic majority in the Senate, offers an opportunity for real reform of the housing-finance system. Up to now, most of the "reform" ideas floating through Washington have been designed to maintain a federal role. But if the 2010 election means anything, it is that the American People want the government to stop pursuing policies that put the Taxpayers at risk for private failures. The policy case against further government suppo...

Jacksonville Pension Director Makes The Case That The Pensions Crisis Is Being Blown Out Of Proportion (MUN)
Email Sent! You have successfully emailed the post. We published an article last month based on projections by Professors Robert Novy-Marx and Joshua Rauh that showed dozens of city Pension Plans running dry in the next few years. The claim that Jacksonville's fund would become insolvent in 2020 drew a response from Jacksonville Police & Fire Pension Fund Director John Keane. Keane objects to the assumption of a 4% return on investment. Keane prefers a 8% rate of return, which would allow c...

Fed minutes: Economy needs bond-buying program
WASHINGTON — Federal Reserve officials stuck with the pace of their $600 billion Treasury Bond-buying program last month because The Economy wasn’t improving fast enough to make a noticeable dent in Unemployment. Spending by consumers and businesses had improved heading into the final month of 2010, and Congress was on the verge of enacting a tax-cut package that would bolster the economy, Fed officials said. That made them more confident the Economic Recovery would gain momentu...

Fed Minutes: High Bar for Changes to QE2
Minutes from the December Federal Reserve meeting point to a high bar for the Central Bank to change its $600 billion bond buying program. Some have argued that a recent run-up in Interest Rates as evidence the Fed’s program is ineffective. But officials noted a number of reasons for the increase, including stronger growth prospect, year-end positioning by the markets and the package of Tax Cuts that provide stimulus but also add to Deficit concerns. There was another reason mentioned ...

According to the Fed, its everything but inflation
The FOMC minutes from the purposely boring Dec meeting after the major criticism they received after the Nov one did not reveal much new news but they gave their opinion on why rates rose after their intentions to have them remain low. They think “investors reportedly revised down their estimates of the ultimate size of the FOMC’s new asset purchase program…Incoming economic data that were viewed as favorable to the outlook” and also concerns with higher Deficits. They ...

What's QE2 accomplishing?
BUTTONWOOD continues his scepticism of the value of the Federal Reserve's new asset purchases in a post citing a study by David Ranson of Wainwright Economics. Mr Ranson has conducted a basic analysis tracking growth and Inflation between 1950 and 2007, relative to change in the monetary base. He finds that growth is higher in years with slower monetary base growth, and Buttonwood concludes: QE just expands claims on wealth, not wealth itself, and thus does not really help The Economy. As you mi...