After these comments from EU Commissioner Pierre Moscovici hit the tape at 9:45am, Italian bonds continue to bounce with the 10 yr yield now down 9 bps at 3.59% after touching 3.80% at the early morning highs. The Italian MIB stock index is now green on the day. The euro is also bouncing. BN: *MOSCOVICI: EU WON'T INTERFERE IN ITALY ECONOMIC POLICIES BN: …
Italy, China, Japan
Italian markets continue lower with the 10 yr yield up another 2.5 bps to 3.71% after the 24 bps jump in the two days prior. Just 5 months ago this yield was 1.75% and with nominal GDP growth at about 2.5%, the debt to GDP spiral is unfortunately back on from an already high base of 130%. With banks and the ECB the main buyers of Italian debt and the latter is now …
Corrected chart
I mistakenly included the wrong chart for the Euro STOXX bank index. Here is correct one: …
EU comments on Italian budget
Well, here are headlines hitting the tape on the EU thoughts of the just released Italian budget: BN: *ITALY'S PLANNED BUDGET DEVIATION IS `UNPRECEDENTED,' EU SAYS BN: *EU COMMISSION ASKS ITALY FOR CLARIFICATIONS ON BUDGET IN LETTER BN: *ITALY BUDGET POINTS TO PARTICULARLY SERIOUS NON-COMPLIANCE: EU BN: *EU SEEKS TO CONTINUE CONSTRUCTIVE DIALOGUE WITH …
Italian yields breaking out
In case you weren’t watching, we are entering the European close with Italian bond yields breaking out to new multi year highs. The 10 yr yield is up by 13 bps to 3.68%, the highest since mid February 2014. The spread to the German 10 yr is the highest since 2013. The MIB stock index is lower by more than 1% and the Euro STOXX bank index is falling by 1.6% and sits at …
Claims/Mfr’g
Initial jobless claims totaled 210k pretty much as expected and down from 215k last week. The 4 week average did tick up to 212k from 210k because a 202k print dropped out of the average. Continuing claims, delayed by a week, fell by 13k to the least since 1973. The bottom line remains the same bottom line that employees are in the labor market cat bird seat to the …
I got some of this and some of that
The effect of the tariffs on global trade should continue to be a big focus and Japan in September said things slowed down. Exports fell 1.2% y/o/y, worse than the forecast of a gain of 2.1%. Imports rose 7%, about half the estimate of up 13.7%. The problem though with figuring out the exact causes of the miss was Typhoon Jebi which shut an important airport where …
Why they will keep on keeping on
In the just released FOMC minutes from the meeting 3 weeks ago, “almost all participants saw little change in their assessment of the economic outlook, although a few of them judged that recent data pointed to a pace of economic activity that was stronger than they had expected earlier this year.” They acknowledged “tight labor markets, with difficulty finding …
Housing Starts
September housing starts totaled 1.21mm, about 10k less than expected and August was revised down by 14k to 1.27mm. The year to date average is now 1.27mm with the best reads seen in early 2018 and we know about the moderation since. Single family starts fell by 8k m/o/m to 871k after rising by 18k in August. Multi family starts dropped by 59k after jumping by 66k …
Foreigners stepped up in August but…
Foreigners stepped up their purchases of US Treasuries in August by $63.1B with almost all of it coming from private buyers while central banks bought for the first time since March. The complexion though reflects further reductions in the holdings of China and Japan but in August that was because T-bills rolled off more than their net purchases of longer term notes …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.