Salient to Investors: The extra interest rate paid by municipalities over companies has fallen 76 percent in 2012, the most since at least 1994, and the smallest since July 2009. Investors typically seek more yield from muni than from corporates because munis trade less frequently and feature annual financial disclosure instead of quarterly
READ MORE... →Salient to Investors: Tony Crescenzi at Pimco said Treasuries will remain in demand in 2013 because they provide good insurance against macro economic risks, and the Fed will keep rates low until 2015 or 2016. Crescenzi is avoiding or keeping a low weighting on maturities beyond 10 years because the Fed’s intent is to reflate a
READ MORE... →Salient to Investors: Caroline Baum writes: Nominal GDP is a good proxy for the Fed’s dual mandate, encompassing both real output and inflation. All the coaxing in the world hasn’t convinced the business community, focused on fiscal policy, that now is a good time to invest and hire. Read the full article at
READ MORE... →Salient to Investors: Jason Rogan at Guggenheim Partners said we are being driven by Europe, where people are showing initiative. Tom Tucci at CIBC World Markets said it’s a short-lived sell-off because of austerity – they will continue to have weak economic growth. Read the full article at http://www.bloomberg.com/news/2012-11-21/treasuries-fluctuate-as-jobless-claims-decline-match-forecast.html
READ MORE... →Salient to Investors: Investors are placing a record volume of bearish bets on junk bonds by shorting State Street’s junk bond ETF that owns the notes as the debt loses value for the first month since May. Markit Group reports the volume of borrowed shares of the SPDR Barclays High Yield Bond
READ MORE... →Salient to Investors: Foreign investors can’t get enough Treasuries despite the fiscal cliff and China’s reduced stake. Aaron Kohli at BNP Paribas said there’s little of a buyers’ strike from the Treasury’s perspective and shows the depth of demand. BNP forecasts the 10-year yield will rise to 2 percent by June 2013 versus the
READ MORE... →Salient to Investors: FRB of Atlanta President Dennis Lockhart said: Continued aggressive use of balance sheet monetary tools will be justified for some time even if fiscal cliff issues are properly addressed. We are not remotely close to substantial improvement on the employment front. We will have to begin to tighten
READ MORE... →Salient to Investors: International net purchases of long-term equities, notes and bonds were $3.3 billion during September versus net purchases of $90.3 billion in August as confidence grew that Europe was resolving its debt crisis and investors sold Treasuries following the Fed’s QE3 announcement. Read the full article at http://www.bloomberg.com/news/2012-11-16/international-buying-of-u-s-assets-plunges-on-europe-optimism.html
READ MORE... →Salient to Investors: Net buying of long-term US equities, notes and bonds totaled $3.3 billion in September versus $90.3 billion in August and versus the median economist estimate of $50 billion. Millan Mulraine at TD Securities said the slowdown was due in part to the improvement in global sentiment towards Europe,
READ MORE... →Salient to Investors: Owi Ruivivar at Goldman Sachs Asset Mgmt said: If surging demand continues for Asian bonds and distorts prices for a long period of time, the likelihood of asset bubbles increases because prices do not fully reflect economic fundamentals. Supply and demand have become the dominant drivers of bond valuations rather
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