Ransquawk Overnight News Summary 16/11/07

Discussion in 'Trading' started by Ransquawk, Nov 16, 2007.

  1. Ransquawk

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    JGB's hit a 22-month high while stocks were on the ropes again (Nikkei -1.57%) due to the on-going troubles in credit markets, adding doubts about when the BoJ could next lift interest rates (RTRS) At 0625 JGB's were trading 137.04 (+0.19).

    The BoJ deputy governor Muto warned that US housing woes could damage the Japanese economy while bank minutes issued showed downside risks dominated a recent rate review meeting, reinforcing views that the next BoJ rate rise will not come until well into next year (RTRS)**

    From the Premier warning about price pressures to front-page editorials calling for action, all signs point to China's central bank increasing interest rates for the sixth time this year, with analysts saying a move could come as soon as today (RTRS)** Overnight also saw Chinese investment in the first 10 months rise at the briskest pace in more than a year, cementing expectations of another hike. If a rate increase does come, the China Securities Journal said it could well be a 27bps rise in the deposit rate and an 18bps rise in lending rates.

    A slowdown in the US economy in coming months could cause a sharp drop in Chinese exports that could slow Chinese growth significantly a research report by the Chinese Commerce Ministry has warned (RTRS)

    SPREADS - US 2s/10s (0630) 82.48 bps (81.15 bps at 2100); US 10s/30s (0630) 37.47 bps (37.86 bps at 2100); EURO 2s/10s (0630) Unchanged (27.00 bps at 2100); EURO 10s/30s (0630) Unchanged (34.10 bps at 2100)

    US/GE 10s (0630): Unchanged (4.25 bps at 2100)
    UK/GE 10s (0630): Unchanged (55.90 bps at 2100)

    Fed's Hoenig (Kansas City, voter): accommodative policy has consequences, Fed in wait-and-see mode, must watch total inflation (RTRS)**
    Thomas Hoenig, who dissented at the October meeting, also said that the Fed was aware that y/y CPI was above 3.0%, rising food and energy prices continue to add to inflation pressure, Fed doesn't want to add so much liquidity that it causes inflation, not at all opposed to necessary action in either way.

    Moody's could downgrade bond insurers, such as MBIA and Ambac (4Cast)**

    US Fed pumped 47.25bln Dollars into financial system yesterday to help ease tight liquidity, the most since September 2001 (RTRS)** This comes on the back of interbank rates spiking yet again yesterday, as anxiety mounts in the current conditions.

    Discount Window borrowings total USD 60.0 billion on Wednesday vs. 1.3 billion in previous week (RTRS)

    S&P puts 64 European synthetic CDOs on watch for a possible downgrade, 18 have exposure to downgraded U.S. RMBs and CDOs (RTRS)**

    Food prices prompt ECB inflation fears (FT) Citing yesterday's ECB monthly bulletin.

    SNB's Roth sees more downside risks to economy (Tages-Anzeiger)** Roth said that while price risks are still limited, should a further weakening of the Franc against the Euro create problems, the SNB would act.

    Japan's former vice finance minister Sakakibara (a.k.a. Mr Yen) said he thought it likely the Yen would fall toward the Y100 level in the next month, stating that this was normal occurrence as Yen carry trades are unwound (CNBC)** At 0630 USD/JPY was trading Y110.15.

    USD 101.2 billion in Treasury coupon payments and redemptions due between November 15-November 30 (RTRS)
    Analysts are noting that big U.S. coupon payments can often result in a dollar negative impact.

    Iran fails to come clean on nuclear weapons, the UN atomic energy watchdog said last night (FT)
    Iran has made important strides towards clarifying past nuclear activities but key questions remain unresolved and it has significantly expanded uranium enrichment.

    U.S. envoy to UN warns China not to block Iran sanctions, U.S. vows to push for more sanctions against Iran (DJ)**

    Oil was little changed at below $94 a barrel, in the wake of losses a day ago triggered by a surprise build in weekly US crude stocks (RTRS) At 0625 crude was trading $93.42, flat on the session.

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