Wednesday, July 30, 2014

Today's Headlines

Bloomberg: 
  • Russia May Aid Sanctioned Banks as MH17 Probe Stymied. Russia’s central bank said it’s ready to help lenders targeted by the U.S. and Europe in their latest round of sanctions, as Dutch experts again abandoned an attempt to visit the crash site of Malaysian Air Flight 17. European Union governments agreed yesterday on their most sweeping sanctions against Russia to date, barring state-owned banks from selling shares or bonds in Europe, restricting the export of equipment to modernize the oil industry and barring the sale of technology with military uses. The sanctions are an attempt to get President Vladimir Putin to back down in Ukraine.
  • Sanctions Fallout Seen Worsening as Russia Curve Inverts. Bond investors are signaling the deepest concern for Russia’s economy in at least two years as the U.S. and European Union toughen sanctions because of the crisis with Ukraine. Russia’s five-year ruble notes yielded more than 10-year debt this week for the first time since June 2012, data compiled by Bloomberg show. Government bonds headed for their worst monthly losses since May 2009, while the Finance Ministry scrapped its weekly debt auction yesterday, the first back-to-back cancellations since April. Bonds risk extending the worst performance in emerging markets as harsher penalties over Russia’s role in the fighting in eastern Ukraine amid rising interest rates threaten to drive the economy into a recession. The inverted yield curve is signaling investors are expecting relatively high rates in the short term, a headwind for growth, said Fedor Bizikov at GHP Group in Moscow
  • Twin Strikes Claim 37 Lives in Gaza as Israel War Widens. Twin strikes on a United Nations school and the main public market in Gaza City claimed the lives of 37 people, Palestinians said, as Israel expanded its three-week-old offensive in the territory. The UN Relief and Works Agency accused Israel of violating international law with the attack on the school, which it said was sheltering 3,300 people who had sought refuge there from the fighting. The Israeli army said troops were responding to fire launched at them from the vicinity. It also said it was looking into the report of an air strike on the market. 
  • European Stocks Fall as Earnings Misses Offset U.S. GDP. European stocks fell as worse-than-forecast earnings from companies including Schneider Electric SE and Holcim Ltd. outweighed a better-than-expected U.S. growth report, while the U.S. joined Europe in imposing new sanctions on Russia for its role in the insurgency in Ukraine. Schneider declined the most in more than two years after first-half adjusted earnings missed analysts’ estimates. Holcim Ltd. lost the most since November 2011 after the cement maker posted lower-than-expected profit because of weak emerging-market currencies. Barclays Plc advanced 4.2 percent after posting a return to profit for the second quarter. PSA Peugeot Citroen rallied the most in five months after reporting its first half-yearly profit since 2011. The Stoxx Europe 600 Index retreated 0.5 percent to 340.44 at the close of trading.
  • Gross Says Investors Should Say ‘Good Evening’ to Asset Gains. Pacific Investment Management Co.’s Bill Gross said investors should say “good evening” to the prospect of future capital gains in asset markets as interest rates are set to rise while the economy grows at a slow pace. “The global economy is left to depend on economic growth for further advances and it is growth that is now and has recently been historically deficient,” the manager of the world’s biggest bond fund wrote in a commentary on Newport Beach, California-based Pimco’s website. “As yields have bottomed and are now expected by the markets to gradually rise, it’s down to growth, and growth is a question mark.”
  • ARMs Race Leaves Yellen Able to Raise Before Carney. Federal Reserve Chair Janet Yellen still may beat Bank of England Governor Mark Carney to the punch bowl. While investors bet the U.K. central bank will raise its benchmark interest rate as soon as the end of this year, with its U.S. counterpart following six months later, economists at London-based Fathom Consulting aren’t so sure. They “would not be surprised” if monetary policy is tightened first in the U.S., satisfying former Fed Chairman William McChesney Martin’s edict that the job of the Fed is “to take away the punch bowl just as the party gets going.”
Wall Street Journal:
MarketWatch.com:
CNBC:
  • Fed tapers another $10 billion. (video) A second-quarter economic rebound did nothing to change the outlook of the Federal Reserve, which stayed the course Wednesday with ultra-easy monetary policy. While the U.S. central bank voted to cut its monthly bond-buying program another $10 billion, it left its short-term interest rate target near zero and expressed only tepid encouragement about growth
ZeroHedge: 
Business Insider: 
Re/code:
Telegraph:

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