Salient to Investors: Nomura said: The Reserve Bank of India’s surprise policy reversal and the first government debt-sale failures in 10 months risk plans to cut the budget deficit. Vivek Rajpal at Nomura said India is expanding at the slowest pace in a decade and tightening by the RBI will cool growth and strain public finances
READ MORE... →Salient to Investors: The Fed’s mixed messages on monetary policy are stoking volatility in the currency market, raising the odds that companies will have a harder time setting up exchange-rate hedges designed to protect overseas earnings. Ulrich Leuchtmann at Commerzbank said if a high-volatility environment were permanent it would cause problems when
READ MORE... →Salient to Investors: Gary Shilling writes: The fog remains thick, so reducing long positions in Treasury bonds and Japanese stocks and cut yen shorts, euro shorts and dollar long positions. Maintaining long positions in US defensive stocks like utilities and health care. Increased short position in junk bonds and initiated
READ MORE... →Salient to Investors: Marc Chandler at Brown Brothers Harriman said there is one big story and that is, of course, Bernanke, and given that his comments rattled the market a couple of times now in a short period of time, many traders will be loath to take significant positions ahead of his address
READ MORE... →Salient to Investors: Jim O’Neill writes: Too much of the world’s trade and finance is conducted in dollars. The exorbitant privilege has lasted too long. It is time one or two of the emerging-market governments did something about the US’s ability to borrow in its own currency – an advantage the rest
READ MORE... →Salient to Investors: Mansoor Mohi-uddin at UBS said the euro and pound will weaken to $1.20 and the pound will fall to $1.41, more than 3-year lows against the dollar, by year-end 2013 as the commitment by the ECB and the BoE to keep interest rates low for extended periods. Mohi-uddin said policy
READ MORE... →Salient to Investors: Ian Stannard at Morgan Stanley says the British pound’s subdued response to recent signs of UK growth points to declines to $1.45 by the end of Q3 and to $1.41 by the end of 2013. Stannard said the UK services sector is the most important part of the UK economy
READ MORE... →Salient to Investors: US companies are poised to post some of their weakest quarterly earnings reports in 4 years, in part due to a stronger dollar. The IMF cut its forecast for global growth in 2013 to 3.1 percent, and for the US to 1.7 percent. Analysts who reduced earnings forecasts
READ MORE... →Salient to Investors: Dan Dorrow at Faros Trading said the strong jobs numbers suggests tapering sooner because the cumulative strong momentum is there. Bill Gross at Pimco sees a stronger dollar ahead, but not US-growth friendly as the ECB and BOE ease while Fed tapering looms. Fed-funds futures indicate the probability
READ MORE... →Salient to Investors: Alexander Friedman at UBS says: What Fed has done is not unexpected and the market reacted because it was ahead of itself. All the Fed was saying was that the US is doing OK, that the data is trending as it should, and that it has confidence
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