Managed Funds Stay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.. Fri, 31 Oct 2014 09:48:49 +0000 SRA Framework 2.0 en-gb Prices up on Europe fears; long end gains after Fed statement;-long-end-gains-after-fed-statement.html;-long-end-gains-after-fed-statement.html imageNEW YORK: US Treasury debt prices rose on Thursday after falling for two straight sessions as worries about deflation in the euro zone prompted investors to seek safety in government debt.

Gains were more pronounced in US 10-year notes and 30-year bonds, with investors getting away from the short end of the curve and buying the long end on the expectation that the Federal Reserve will raise rates next year.

On Wednesday, the Fed said it has ended its bond-purchase program.

A stronger-than-expected US gross domestic product growth number for the third quarter did little to ease investors' aversion to risky assets. Analysts said GDP growth was boosted by defense-related spending and less by consumer and business expenditures, which market participants wanted to see.

"It's a beat, but GDP was propped up by defense spending," said Tom di Galoma, head of rates and credit trading at ED&F Man in New York.

"I still think the Fed is still a ways away from raising rates. The Fed will continue to drag its feet, not tighten, even though people think the Fed is ready to tighten." US Treasuries were further lifted by weak euro zone data that prompted a flight to German Bunds, with yields falling to a more than one-week low, analysts said.

In mid-morning trading, benchmark 10-year Treasury notes were up 9/32 in price and yielding 2.287 percent. Yields hit a three-week high of 2.362 percent on Wednesday after the Fed said the US economic recovery remained largely on track despite weakness elsewhere in the world.

US 30-year bond prices also rose, up 22/32 with a yield of 3.012 percent.

Treasury debt prices did pare gains after the first US GDP reading showed a 3.5 percent expansion in the third quarter, beating economists' expectations for a 3.0 percent rise.

A separate report from the Labor Department on Thursday showed first-time applications for unemployment benefits rose modestly last week, but remained at levels consistent with firming labor market conditions.

That also helped Treasuries briefly trim their gains.

At the short end of the curve, namely two-, three-and five-year notes, prices were mostly flat.

"There is a lot of repositioning on the yield curve going on because the Fed's statement was slightly hawkish," said ED&F's Di Galoma.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Thu, 30 Oct 2014 15:20:23 +0000
Italy's 5-year debt costs rise at auction, 10-year yields stable imageMILAN: Italy's five-year borrowing costs rose on Thursday at a bond auction as investors fretting about the euro zone's prospects amid slowing global economic growth have increasingly turned to safer assets in recent weeks.

Benchmark 10-year yields however remained broadly unchanged as Italy paid 2.44 percent to sell a 2024 bond against 2.45 percent a month ago.

The bid-to-cover ratio for the sale of the 10-year bonds was 1.48 versus 1.34 then.

Italy sold a total of 7.205 billion euros over three bonds, near the top of its planned issue range of between 5.5 billion and 7.25 billion euros.

A five-year bond due in 2019 fetched an average yield of 1.23 percent versus 1.06 percent at a similar sale a month ago.

Thursday's sale was covered 1.5 times, roughly the same as a month ago.

The treasury also sold nearly 2 billion euros of a floating-rate CCTeu bond due in 2020 at an average 1.25 percent yield. Bids totalled 1.4 times tha amount sold.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Thu, 30 Oct 2014 12:09:07 +0000
Treasury prices ease ahead of Fed policymakers' gathering imageNEW YORK: US Treasuries prices eased on Tuesday as global equities markets rose and as investors awaited the results of a U.S. Federal Reserve policymakers' meeting that could move markets.

Prices of 10-year Treasury notes were last off 6/32, after narrowing deeper losses, and were yielding 2.28 percent. The 10-year yield closed at 2.266 percent on Monday.

"The market is waiting on the FOMC (Federal Open Market Committee)," said Wilmer Stith, fixed income portfolio manager at Wilmington Trust in Baltimore, Maryland. "We are on pins and needles about whether they will make changes."

Fed Chair Janet Yellen and other U.S. central bank policymakers were scheduled on Tuesday to begin a two-day meeting and will issue a policy statement on Wednesday.

Analysts predict the FOMC will try to soothe recent market volatility by reinforcing the message that while the Fed is winding up its stimulus program it could wait quite a while before raising historically low U.S. interest rates.

"I think it will be steady as she goes," Stith said.

Treasury yields, which move in the opposite direction to prices, had been higher in earlier trading, in part because stock prices and yields on German bunds and other sovereign debt in Europe were rising, he said.

The MSCI world equity index, which tracks shares in 45 nations, was up 0.72 percent on Tuesday. Wall Street prices were also ahead in early trading.

Treasuries price declines narrowed after the U.S. Commerce Department reported a surprising and sharp drop in September of new orders for capital goods by U.S. businesses. It was the biggest slide in orders since January.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.7 percent last month, according to the government.

The decline confounded Wall Street's expectations for a 0.6 percent increase and was at odds with business surveys, which show improving business appetite for capital investment.

"This was a disappointing report, and it does suggest that the contribution from this segment of the economy to GDP will be slightly less than previously thought," TD Securities strategist Millan Mulraine told clients.

The yield on the 30-year bond last stood at 3.061 percent on a price decline of 16/32. It had yielded as much as 3.068 percent in earlier trading.

Copyright Reuters, 2014

]]> (Imaduddin) Managed Funds Tue, 28 Oct 2014 16:02:09 +0000
US bond prices up on economic data, Brazil election imageNEW YORK: US Treasury debt prices rose on Monday in a safe-haven bid on concerns about weak U.S. economic data and the steep drop in Brazil's stock market following the re-election of incumbent leftist Dilma Rousseff.

Economic data on the world's largest economy wobbled again on Monday, with a slowing in the U.S. services sector and a less-than-expected rise in pending home sales, elevating U.S. bond prices.

U.S. government 30-year bond yields, which move inversely with prices, fell after four straight days of gains, while yields on benchmark 10-year Treasuries slid for a second consecutive session.

The Brazilian stock market, meanwhile, was down nearly 5 percent in mid-morning trading, while the real tumbled to a near six-year low against the dollar as Rousseff, who has been blamed for the country's sluggish economy, won re-election Sunday night. Many investors had backed rival candidate Aecio Neves. Brazil's outcome has turned investors cautious on risky assets overall.

"The bid in Treasuries has a little more to do with Brazil, following the re-election of Rousseff, " said Tom di Galoma, head of rates and credit trading at ED&F Man in New York.

"People are concerned about the economy in Brazil and emerging markets in general. So I'm looking at the yield of 10-year notes sort of supported at 2.30 percent, going back to 2.20 at some point."

Worries about European banks following a health check that showed one in five of the region's banks failed the landmark stress tests by the European Central Bank also helped boosted Treasury debt prices, analysts said.

Benchmark 10-year Treasury notes last traded up 6/32 in price with a yield of 2.251 percent from 2.275 percent late on Friday. The 10-year yield fell to the day's low after contracts to buy previously owned U.S. homes rebounded less than expected in September, pointing to just a gradual housing market recovery.

The 30-year bonds rose 15/32 in price for a yield of 3.026 percent, from Friday's 3.046 percent. U.S. 30-year yields hit session highs after data showed the pace of growth in the U.S. services sector slowed in October compared with the previous month to its lowest level in six months.

The flash services sector Purchasing Managers Index compiled by information services company Markit slipped to 57.3 in October from 58.9 in September, hitting its lowest level since April. A Reuters poll forecast the October reading at 58.0.

Also on Monday, the New York Federal Reserve conducted what could well be the last of the quantitative easing buybacks, purchasing between 850 million to $1.05 billion in bonds dated from February 15, 2036 through August 15, 2044. sale.

Copyright Reuters, 2014

]]> (Imaduddin) Managed Funds Mon, 27 Oct 2014 16:15:46 +0000
Romania sells more Feb. 2025 debt than planned imageBUCHAREST: Romania sold a more than planned 593.8 million lei ($170.1 million) worth of Feb. 2025 treasury bonds on Thursday, with the average accepted yield at 3.93 percent, central bank data showed.

Debt managers, who had planned to sell 500 million lei, last issued the paper last month at an average yield of 4.36 percent.

Earlier this week, the European Union state raised 1.5 billion euros in a 10-year Eurobond issue, pre-financing some of its funding needs for next year.

It tapped foreign markets twice in the first galf.

So far this year, Romania has sold just under 31 billion lei and 930 million euros at domestic debt tenders.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Thu, 23 Oct 2014 11:56:21 +0000
Prices off as global markets recover imageNEW YORK: US Treasuries prices posted their second straight day of declines on Friday as Wall Street and European stock markets bounced back from a sharp sell-off.

Benchmark 10-year notes, which rose in price by as much as 3 points on Wednesday on fears over the global economy, were off 12/32 on Friday to yield 2.172 percent in early New York trading.

"Some reason has returned to the market," said Sharon Stark, fixed income strategist at D.A. Davidson in St. Petersburg, Florida. "There's a sense things got a little overdone."

A traditional safe-haven for investors, Treasuries rose steeply early this week on heavy buying as fears mounted that the global economy was slowing and America's growth prospects were dimming.

But on Friday, Wall Street's main indices were up nearly 1 percent, and the MSCI index of world stocks was ahead 0.85 percent. Stocks in Europe, where fears of a recession are building, were also up.

"The US economy is affected by Europe, but it isn't to the degree many investors initially thought, especially with regards to net exports," Stark said.

"European exports on average account for about a half percent of GDP." Thirty-year Treasuries were last off 23/32 in price to yield 2.973 percent, compared with a 2.941 percent yield at Thursday's close.

Short maturities were also down in price, with the seven-year note off 9/32 and yielding 1.86 percent.

Declines in Treasuries deepened after the US Commerce Department reported that housing starts and permits rose in September, a signal the market's modest recovery is supporting what appears to be growing strength in the broader economy.

Groundbreaking rose 6.3 percent to an annual 1.02 million-unit pace.

Economists polled by Reuters had forecast a slightly smaller gain.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Fri, 17 Oct 2014 15:49:27 +0000
US bond prices fall on Fed's Bullard remarks imageNEW YORK: US Treasuries prices fell mid-morning Thursday with the 30-year bond losing more than 1 point after St. Louis Federal Reserve President James Bullard said the U.S. central bank might want to consider maintaining its bond purchase program to help the economy.

"Inflation expectations are dropping in the U.S., and that is something that a central bank cannot abide," the regional Fed chief told Bloomberg television. "We have to make sure that inflation and inflation expectations remain near our target."

Prolonged bond purchase stimulus from the Fed would support domestic economic growth, boosting appetite for stocks and inflation expectations and pushing up bond yields, traders said.

Benchmark 10-year Treasury notes last traded 12/32 lower in price to yield 2.134 percent, up 4 basis points from late on Wednesday.

Copyright Reuters, 2014

]]> (Imaduddin) Managed Funds Thu, 16 Oct 2014 15:24:55 +0000
Greek 10-year yields top 8pc, first time since Feb

imageLONDON: Greek 10-year government bond yields rose above 8 percent for the first time since February of this year on Thursday, driven by concerns over the prospect of early elections and Athens' plans to wean itself off international aid.

Greek yields were last 20 basis points higher on the day at 8.05 percent.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Thu, 16 Oct 2014 07:58:18 +0000
Treasuries prices touch new highs as US data disappoints imageNEW YORK: US Treasuries prices jumped on Wednesday, with the 30-year bond touching a near two-year high as disappointing U.S. economic data aggravated widening worries about a global slowdown.

Prices of 30-year Treasuries rose more than 5 points to yield as little as 2.673 percent, a level last seen in November 2012, before pulling back.

The long bond last traded up 2-11/32 points and yielded 2.847 percent. On Friday, the maturity yielded 3.015 percent.

Benchmark 10-year notes added as many as 3 points in price before easing and were last yielding 2.043 percent, the lowest since May 2013 and below the 2.08 percent level viewed as a key price support by some institutional investors.

"There was a trifecta of weak data this morning: several disappointments in sales, manufacturing and prices," said Kim Rupert, managing director of Action Economics in San Francisco. "That's just adding to the fear of a global slowdown. And then the price action is being exacerbated by the Ebola fears."

Prices widened dramatically in early New York trading after the U.S. Commerce Department reported that U.S. retail sales fell 0.3 percent in September, a surprisingly cautionary sign for the strength of consumer demand seen as central to hopes for U.S. growth.

"The tone of this report was very disappointing and it suggests that consumer spending activity ended the quarter on a very weak footing," TD Securities strategist Millan Mulraine told clients. "And with consumer confidence appearing to be deteriorating in recent weeks, this weakening momentum appears to have been carried into this quarter."

Other U.S. economic reports signaled weakness in prices that American producers get.

Treasuries are widely regarded as the safest of investments and have been benefiting from a streak of losses on Wall Street and buying by investors who had been betting on increases in U.S. interest rates, according to strategists and traders.

Copyright Reuters, 2014

]]> (Imaduddin) Managed Funds Wed, 15 Oct 2014 16:37:04 +0000
US 30-year bond yield breaks below 3 percent imageNEW YORK: The yield on US 30-year Treasuries yield on Tuesday fell below 3 percent for the first time since spring 2013 due to safe-haven demand spurred by the recent sell-off in the stock market and growing worries about a weakening global economy.

In early U.S. trading, the 30-year Treasuries yield touched a session low of 2.943 percent at 5:59 a.m. (0959 GMT), according to Reuters data. This compared with a closing level of 3.009 percent on Friday.

The 30-year yield was last 2.959 percent, hovering at its lowest level since early May 2013.

The U.S. bond market was shut on Monday in observance of the Columbus Day holiday.

Copyright Reuters, 2014

]]> (Imaduddin) Managed Funds Tue, 14 Oct 2014 13:54:09 +0000