Monthly Archives: May 2010
Bond Market Troubles Could Signal Bursting of China Property Bubble
A widening of spreads on dollar bonds issued by developers could signal the imminent bursting of China’s property bubble. These bonds have been the worst performing of all US-denominated, non-financial, Asian corporate debt, and are now at a 2.26 percent premium to US Treasuries Continue reading
Hurricane Fears Push Oil Prices Higher
Oil prices continued the gains made last week, reaching $74.51 cents a barrel in electronic trading on the New York Mercantile Exchange. Despite Monday being a holiday in the US and the UK, predictions that this could be the worst hurricane season in five years, has investors nervous that supply lines could be disrupted in the same manner that Hurricane Katrina affected operations in the Gulf Coast in 2005. There is also speculation that the on-going problems experienced at the BP well blow-out will result in even greater restrictions on off-shore drilling Continue reading
China Warns Euro Debt Crisis Could Trigger Second Recession
Suggesting that the European debt crisis could trigger a second “double-dip” recession, China’s Premier Wen Jiaboa warned it is too early to wind down government stimulus spending. “The world economy is stable and beginning to revive, but this revival is slow and there are many uncertainties and destabilizing factors,” the Premier cautioned. “I believe that we can’t say with absolute certainty, so we must undertake close observation and act to prevent it. Continue reading
EURO going nowhere fast
With the US and UK holiday weekend, illiquid trading and month end-rebalancing has dominated this jaded market, who is acclimatizing itself to a Spanish credit downgrade and the potential of France to follow. The French budget minister admitted that it would be a ‘stretch’ for France to keep its AAA rating without some tough budget decisions, while German finance minister hinted at further tax hikes to address its deficit. Continue reading
Summer Upon Us!
For now, the Euro zone debt crisis appears to have been averted. For now. The Euro is higher for the second straight day as short-covering is taking place. As I’ve repeatedly mentioned, every day that the Euro can get by without negative news is a positive for world markets in general. As a result, we’ve seen recent gains in world equity markets and commodities as they rebound from 9-month lows. However, don’t be lulled into a false sense of confidence as there still is major work ahead for the Euro. The trend is still clearly down, and there is possible resistance in the 1.245 & 1.26 ranges. This morning, consumer spending figures in the US came in worse than expected, exhibiting signs that the consumer-led recovery may have stalled. Heading into the long weekend here in the US, expect volume to be light as the “summer slowdown” officially kicks off. Continue reading
US Consumer Spending Down as Savings Increase
The US Commerce Department released the latest consumer spending results this morning which showed that spending remained flat in April compared to an expected increase of 0.3 percent. Continue reading
Oil Prices Move Higher
Yesterday’s vote of confidence in the euro by China which triggered a return of optimism in the markets, appears to be extending into a second day. Continue reading
EURO month end requirements are early
What else do you expect China to say? Nah, we don’t like Europe let’s sell Continue reading
Appetite For Risk!
The US reported growth figures today that while positive, have missed expectations. US GDP came in at 3% vs. Continue reading