Salient to Investors: Concern is rising that the Fed will curtail unprecedented stimulus while debt investors are becoming more discriminating Jody Lurie at Janney Montgomery Scott said the last year was an issuer’s market but the tables have turned as borrowers now listen to the demands of investors. Eric Beinstein at JPMorgan
READ MORE... →Salient to Investors: Bill Gross at Pimco said: The Fed will not taper with unemployment rising to 7.6 percent and very dire metrics for the average work week and wages, but a more normal economy requires the Fed to raise interest rates to more normal levels because QE and low interest rates are distorting capital
READ MORE... →Salient to Investors: Freddie Mac said the average 30-yr fixed-rate mortgage is at 3.91% versus 3.3% in early May. Doug Duncan at Fannie Mae said it is unlikely that rates will ever be that low again because when QE ends, private investors will demand higher rates for borrowers. The Fed will stop
READ MORE... →Salient to Investors: Kian Abouhossein et al at J.P. Morgan Cazenove said: The emerging market sell-off sparked by speculation of reduced Fed stimulus may cause a material slowdown in emerging market fixed-income revenues with volumes drying up. December is most likely for the first tapering by the Fed, but if the labor
READ MORE... →Salient to Investors: Hitoshi Asaoka at Mizuho Trust & Banking expects the yen to weaken, saying should the Fed reduce stimulus, US Treasury yields will rise and the currencies of countries easing monetary policy will be sold and those of nations tightening will be bought. Steve Brice at Standard Chartered thinks
READ MORE... →Salient to Investors: Luca Jellinek at Credit Agricole said investors should not turn positive on US Treasuries as fixed-income investors will remain obsessed with the Fed taper. Read the full article at http://www.bloomberg.com/news/2013-06-06/don-t-become-bullish-on-treasuries-now-credit-agricole-says.html Click here to receive free and immediate email alerts of the latest forecasts.
READ MORE... →Salient to Investors: Richard Fisher at FRB of Dallas sees the end of a 30-year rally in bonds so the Fed should taper QE with housing in good shape, construction has resumed, and housing prices are appreciating significantly. Fisher said the market has begun to discount that this will not go on forever. Esther
READ MORE... →Salient to Investors: David Stockman says: We are in serial bubbles. Greenspan and Bernanke have inflated bubbles for years by keeping interest rates low. A system of bubble finance is geared towards massive borrowing and speculation on leverage, everyone will do it – a gambler’s dream. Financial markets are full
READ MORE... →Salient to Investors: Yields on US Treasuries, German bunds and Japanese government bonds are 1 standard deviation above their historical norm. Yields on Treasuries and bunds are more than 40 basis points below what would be 2 standard deviations from their means, and Japanese bonds are 5 basis points away.
READ MORE... →Salient to Investors: OECD predicts faster global economic growth, led by the US and Japan: growth in member countries will accelerate to 2.3 percent in 2014 from 1.2 percent in 2013, China, will grow 8.4 percent in 2014 after growth of 7.8 percent in 2013. Neil Mackinnon at VTB Capital
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