The Banking and Strategy Initiative

Chillin' out till it needs to be funded

IT’S MONDAY: The Fed purchase program is quite a workout for the Market

Fisher seems to have kicked things off immediately with his comments positing that slowing down the $85B monthly bond purchase program could do US some good, Then Chicago Fed reported an ever worsening Midwest CFNAIdata for the month of April even as the moving average improves and auto sales and gasoline trends look well about to turn on themselves. The Consumer credit report that most added $15 B in Student loans rolling over from Banks to the Fed Balance sheets apart, Evans is also followed by Dudley speaking tomorrow and then Wednesday will be busy with Ben Bernanke testifying on the mount and the MBS might just choke up a few minutes there.

Till then the US also gets buffetted by the plethora of April’s weak retail sales data from around the globe, RBA’s meeting minutes ont he latest rate cut and yet another negative GDP report from Singapore and the ever precarious manufacturing PMI flash from China. Italian industrial sales and new orders data started things off positively across the pond, even as the Euro gave up gains to 1.28 last week despite what we thought were better monthly reports and a known weakness had already been discounted as the Euro trade on the third leg against the Yen led weakness in the Dollar seemed to have wound down.

That apart, new positions are still likely to be bullish on the euro as Euro zone debt rushes for better yields, Monday morning TBill auctions will remain much better covered as amounts have been pegged lower by the Treasury A lot of senior speak is due in Brussels too but nothing is slated per se for the new union  or the common economic government et al (WSJ blogs)

UK inflation and PPI data will also affect the Dow open somewhat tomorrow as the GBP had quite overtaken the Euro in a jagged edge last month even as banks work out a new two faced trade plus survey substitute for the LIBOR and corporate credit conditions ease up as do trading in the month of April and one guesses May. At hand are conflicting reports however with JPMorgan getting volumes and ready to toughen underwriting while others easing up underwriting to get better loan volumes. Q1 investment bank activity in Asia and US was debt led with US majors JP Morgan  and BofA Merrill Lynch scoring 65% of their comeback advisory income  of $1.3 B each from Bond and Loan syndication. HSBC managed another $10 B debt raising mandates in Asia this week to Friday even as Global G3 issuers also managed to raise $3 B from Asia.

Thursday PMI reports for May will post rush verdicts on the Euro across the pond with all the 17 reporting PMI behind the consolidated Euro PMI before the afternoonr eports of Manufacturing and Services PMI in the US and the monthly leading indicators reports including the new ECRI data also cycles in with confirmation of the debate on the recovery verdict before Friday is over

New Home Sales and Mass Layoffs reports could interest you too on Thursday. Ryanair is reporting results if you are still stuck on new financials as do Vodafone, Home Depot, Marks & Spencer and SAB Miller on Tuesday when no news could be the spin from JPMorgan on its say on directors  say vote while Deutsche Bank and Goldman Sachs AGMs are also marked for Thursday, HSBC on  Friday

Markets are sitting pretty with Yahoo’s tumblr buy bringing the 13F rush into this week esp with Gold and Silver recording the most exits in recent history. Danone is trying again in China with two JVs with mengniu defining its market reach in minority stakes , one of which is the elusive yogurt market

Bottomline: The uptick has to be sustained in the second half in economic data for the Fed to go through with cuts in liquidity to help raise back interest rates and further stimulate the growth-inflation interaction

 

 

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