Managed FundsStay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder..http://www.brecorder.com/business-a-finance/managed-funds.htmlMon, 22 Sep 2014 20:14:31 +0000SRA Framework 2.0en-gbBelgium raises funds at record low cost at bond auction http://www.brecorder.com/business-a-finance/managed-funds/196634-belgium-raises-funds-at-record-low-cost-at-bond-auction.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/196634-belgium-raises-funds-at-record-low-cost-at-bond-auction.htmlimageBRUSSELS: Belgium's borrowing costs dropped to a record low on Monday at a 2 billion euro ($2.6 billion) sale of its 10- and 20-year benchmark bonds, the debt agency said on Monday.

The 10-year benchmark bond, with a 2.60 percent coupon, sold for a yield of 1.284 percent, down from 1.547 percent at a July auction which was already a record low for the maturity.

Investors took a yield of 2.214 percent for the 3.00 percent 20-year bond , also down from the 2.639 percent when this OLO was first issued in January.

With 26.566 billion euros of long- and medium-term bonds sold, Belgium has now raised some 88.55 percent of its 30 billion target for 2014, with two more auctions planned.

The debt agency said it was unlikely to raise this target, as it has often done in the past to pre-fund the following year's requirement as well as to shift from shorter-term bills to longer-term bonds.

The average maturity of the kingdom's debt is 7.7 years, the debt agency said.

The AA-rated sovereign had set a target range of 1.5 to 2.0 billion euros for Monday's auction. At 2.006 billion euros, it was the second smallest auction this year.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui)Managed FundsMon, 22 Sep 2014 12:21:08 +0000
German Bund yields slightly higher after Scotland votes 'No' http://www.brecorder.com/business-a-finance/managed-funds/196060-german-bund-yields-slightly-higher-after-scotland-votes-no.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/196060-german-bund-yields-slightly-higher-after-scotland-votes-no.htmlimageLONDON: German 10-year Bund yields rose slightly in early trade in Europe on Friday, with some investors offloading some of the top-rated debt purchased on the back of uncertainty over Scotland's independence referendum.

Results showed support for staying part of the United Kingdom had now exceeded 50 percent of the turnout, meaning that the secession camp could not win the vote.

"It will bring some relief, mostly in the UK but it will have spillovers to the euro area markets," said Jan von Gerich, chief fixed income analyst at Nordea.

"In the core, some of the safety flows should be unwound."

Ten-year Bund yields rose 2 basis points to 1.065 percent. Bund futures will start trading at 0600 GMT, with trading in other euro zone markets expected to pick up an hour later.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui)Managed FundsFri, 19 Sep 2014 05:34:01 +0000
Treasuries prices slip as Fed forecasts boost short-maturity yieldshttp://www.brecorder.com/business-a-finance/managed-funds/196004-treasuries-prices-slip-as-fed-forecasts-boost-short-maturity-yields.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/196004-treasuries-prices-slip-as-fed-forecasts-boost-short-maturity-yields.htmlimageNEW YORK: US Treasury debt prices turned down on Thursday, with investors driving some shorter-maturity yields to highs not seen since 2011 after the Federal Reserve on Wednesday raised forecasts for some interest rates.

Yields on two-year notes touched a high of 0.597 percent before settling back to 0.585 percent on a 2/32 price decline. That level was last seen in May 2011.

Three- and five-year yields were also up sharply. Prices for three-year notes were off 4/32, taking their yield to 1.117 percent, a level last touched during April 2011.

Five-year notes were off 7/32 in price and yielding 1.851 percent after touching 1.874 percent.

On Wednesday, after a two-day meeting, Fed policymakers issued a policy statement and outlooks that largely soothed investors' fears the U.S. central bank was quickening its shift to raising interest rates.

But the outlook included forecasts of higher-than-expected rates for loans among banks during 2015 and 2016.

"The concrete message yesterday was a faster rate forecast from the Fed members themselves," said Jim Vogel, interest rate strategist at FTN Financial in Memphis. "And the fact they did that with a flat to down economic forecast reduces the willingness of traders to believe the Fed when it says it is data dependent."

Yields on benchmark 10-year Treasury notes were up to 2.63 percent on a price decline of 8/32 after briefly touching a session high of 2.642 percent on mixed economic data on America's labor and housing markets.

Prices of 30-year Treasuries were off 2/32 and yielded 3.368 percent.

Early on Thursday, the government reported that the number of Americans filing new claims for unemployment benefits fell more than expected last week, suggesting a sharp slowdown in job growth last month was probably an aberration.

Other data on Thursday showed housing starts declined in August, while upward revisions for groundbreaking in July offered hope the housing market was gradually continuing to improve.

Copyright Reuters, 2014

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imad_kueconomist@yahoo.com (Imaduddin)Managed FundsThu, 18 Sep 2014 15:44:24 +0000
India bond yields end steady for 3rd straight day; Fed in focus http://www.brecorder.com/business-a-finance/managed-funds/195828-india-bond-yields-end-steady-for-3rd-straight-day;-fed-in-focus.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/195828-india-bond-yields-end-steady-for-3rd-straight-day;-fed-in-focus.htmlimageMUMBAI: Indian government bond yields ended steady for a third straight session on Wednesday, ahead of the outcome of the US Federal Reserve's policy meeting, which is expected to offer fresh clues on when it plans to begin lifting interest rates.

India, among other emerging markets, has benefited from the US Fed's loose monetary policies. Foreign institutional investors (FIIs) have bought a net $18.75 billion worth of debt so far this year.

However, FIIs have used up almost all of their existing $25 billion limit, raising caution. Reserve Bank of India Deputy Governor H.R. Khan said on Tuesday there was no proposal yet on raising the limits.

That could cap any significant gains in government bonds, analysts said, although debt markets could be hit should the Fed signal early rate hikes.

"Barring a sharp move in US treasury yields above 2.75 percent, we think Indian government bond yields should remain in current band or head a bit lower in the near term given improving macro and fiscal factors ," said Bekxy Kuriakose, head of fixed income trading at Principal PNB Asset Management.

The benchmark 10-year bond yield ended steady at its previous close of 8.50 percent.

Shorter-end bond yields, particularly 7.28 percent 2019 , ended down 3 basis points at 8.52 percent from Tuesday's close of 8.55 percent.

The market is also awaiting the next tranche of debt buyback, as indicated by the central bank deputy on Tuesday, after the RBI bought 127.6 billion rupees ($2.10 billion) in the last session.

Overnight cash rates remained comfortably near the repo rate as the central bank continued to inject liquidity through variable overnight repo auctions as well as through the daily liquidity adjustment facility.

Total volumes in the bond market fell to 184.25 billion rupees, lower than Tuesday's 198.9 billion rupees, as well as below the daily average in the last three months.

In the overnight indexed swap market, the benchmark 5-year swap rate and the one-year rate ended down 1 bp each at 7.94 percent and 8.43 percent.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui)Managed FundsThu, 18 Sep 2014 05:48:49 +0000
Spanish yields fall as polls show narrow lead for Unionist Scotshttp://www.brecorder.com/business-a-finance/managed-funds/195741-spanish-yields-fall-as-polls-show-narrow-lead-for-unionist-scots.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/195741-spanish-yields-fall-as-polls-show-narrow-lead-for-unionist-scots.htmlimageLONDON: Spanish bond yields fell on Wednesday after new opinion polls on Scotland's independence referendum, closely watched in Catalonia, showed a narrow lead for those who wanted to remain in the United Kingdom.

Elsewhere in the euro zone, yields fell on expectations some of the long-term loans the European Central Bank is offering this week will be re-invested in government debt.

Spanish bonds were the stand-out performers, though. They reversed losses that piled up over the past 10 days, amid concern a victory for Scottish separatists would encourage Spain's own separatists in Catalonia, which accounts for a fifth of Spanish economic output.

Those fears were eased by two polls overnight that put support for the union at 52 percent. Ten-year yields hit a day's low of 2.25 percent, some 11 basis points down on the day, after a third poll was released showing the same trend.

Gambling company Betfair said on Tuesday it was already paying out winnings to customers who had staked money on a "No" vote.

"With polls overnight showing the "No" vote with a narrow majority, the hope is the clamour for separation in Catalonia will ease," said Nick Stamenkovic, bond strategist at RIA Capital Markets in Edinburgh. Traders said the move bode well for Spain's auction of up to 3.5 billion euros in bonds on Thursday.

EASY MONEY:

Portuguese two-year bonds, the highest-yielding in the euro zone, outperformed their peers in a sign that investors were positioning for the ECB's offering on Thursday of four-year loans to banks.

It will be the first in a series that could result in banks getting up to 1 trillion euros in cheap loans.

The aim is to encourage banks to lend to the real economy, but they can return the money to the ECB with no penalty if they fail to increase their lending books after two years. Meanwhile, they can invest in government bonds. Portuguese two-year bonds were yielding 0.65 percent, down 7 bps.

"Investors are pre-empting the carry trade," said Marco Brancolini, a fixed-income analyst at RBS. At the other end of the credit risk scale, Germany sold 3.34 billion euros in two-year bonds at an average yield of minus 0.07 percent, with demand 2.3 times the amount sold.

Any excess cash kept in overnight deposits at the ECB incurs a 20 bps penalty, so many investors prefer to lose 7 bps and keep the money in short-term, highly liquid German debt.

In the United States, the outlook for monetary policy may change. The Federal Reserve's pledge to keep rates near zero for "a considerable time" may be tweaked at a policy meeting that ends on Thursday, bringing forward expectations for interest rate hikes.

"Whilst a hint of an earlier-than-expected interest rate rise could well introduce some volatility into the market, I find it difficult to believe that the Fed will do anything other than make haste slowly. There is no overwhelming need to come across all hawkish yet," said Gary Jenkins, chief credit strategist at LNG Capital.

INFLATION SLUMP:

Tame U.S consumer price growth soothed worries of an imminent tilt towards tighter monetary policy from the Fed. But it also pushed down market expectations of euro zone inflation.

The five-year, five-year forward breakeven rate the European Central Bank's preferred measure of what the market thinks the inflation outlook is fell to 1.9341 percent from around 1.96 percent before the US CPI report.

Traders said that was the lowest since August. "The big impact today was that the US inflation print was very low, and that has a bearing on other markets to some extent," a trader said.

"It looks very similar to levels hit in August, which were also similar to lows hit in the euro zone crisis period of 2010 and 2011."

Copyright Reuters, 2014

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m.iqbal1967@yahoo.com (Muhammad Iqbal)Managed FundsWed, 17 Sep 2014 17:37:36 +0000
Treasuries price rise as inflation data soothe Fed fearshttp://www.brecorder.com/business-a-finance/managed-funds/195733-treasuries-price-rise-as-inflation-data-soothe-fed-fears.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/195733-treasuries-price-rise-as-inflation-data-soothe-fed-fears.htmlimageNEW YORK: US Treasury debt prices were boosted Wednesday by tame U.S. inflation data that soothed worries Federal Reserve policymakers meeting in Washington were likely to soon tilt toward tightening American monetary policy.

Yields on benchmark 10-year Treasury notes dipped to a session low of 2.558 percent shortly after government economists reported U.S. consumer prices fell for the first time in nearly 1-1/2 years in August.

Ten-year notes were last up 6/32 in price and yielding 2.5652 percent.

The Labor Department said its Consumer Price Index dropped 0.2 percent last month as a broad decline in energy prices offset increases in food and shelter costs. It was the first decline since April last year and followed a 0.1 percent gain in July.

Stripping out food and energy prices, the so-called core CPI was flat in August for the first time since October 2010 after nudging up 0.1 percent in July.

"The core was unchanged, and that's the first time the core's been unchanged month over month since October 2010," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut. "That's something people are taking notice of.

"And because of that fact there is very little pressure on the Fed to do anything less dovish this afternoon," Lyngen said. "So that is bullish for the Treasury market."

Prices of 30-year Treasuries also rose, while shorter maturities were mixed in early New York trading. The long bond was up 8/32 and last yielding 3.34 percent.

Bond traders were focused on the Fed meeting, which will end on Wednesday with a news conference by Fed Chair Janet Yellen and a policy statement that may include a shift in the central bank's planned return to rising interest rates.

"The market will be all about the Fed today," Lyngen said.

Treasuries, which were up for a third straight session after a sell-off last week, have been also benefited from investor anxieties about Thursday's independence vote in Scotland that has potential to rattle markets.

But traders on Wednesday, according to Lyngen, were fixated on whether or not the Fed will retain the phrase "considerable time" in it outlook statement. The phrase has become a touchstone in markets for when the Fed might start raising interest rates and dropping it would be taken as a hawkish step.

Copyright Reuters, 2014

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imad_kueconomist@yahoo.com (Imaduddin)Managed FundsWed, 17 Sep 2014 17:07:46 +0000
Five-year gilts fall to 4-week low on eve of Scottish referendum http://www.brecorder.com/business-a-finance/managed-funds/195715-five-year-gilts-fall-to-4-week-low-on-eve-of-scottish-referendum.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/195715-five-year-gilts-fall-to-4-week-low-on-eve-of-scottish-referendum.htmlimageLONDON: Short-dated British government bonds fell on Wednesday, the day before Scots go to the polls to vote on whether to end their centuries-old union with the rest of the United Kingdom.

Volumes were thin, as traders were reluctant to make big bets on the outcome of the referendum, which remains too close to call. A series of opinion polls overnight showed a small majority of Scots favour remaining part of the United Kingdom, but this majority has narrowed markedly in recent weeks.

Five-year gilt yields touched their highest level since Aug. 28 at 1.835 percent, up 4 basis points, and two-year yields also rose the same amount on the day to 0.86 percent.

Prices for both gilts fell relative to 10-year gilts, whose yields were flat at 2.52 percent. Ten-year gilts' yield spread over Bunds was little changed on the day at 147 basis points.

Peter Goves, fixed income strategist at Citi, said the rise in short-dated yields probably reflected a bigger-than-expected fall in British unemployment, which dropped to 6.2 percent, its lowest in more than five years.

This potentially brings forward the date at which the Bank of England raises interest rates.

"The front end is susceptible to anything that might affect the first hike," he said.

However, Wednesday's labour market data also showed that wage growth - another indicator closely monitored by the BoE - remained extremely weak and minutes of the BoE's September Monetary Policy Committee showed that most policymakers remained firmly against tightening policy.

"Wage data remains very well behaved, so the chances of a rate hike before the year-end remain small," said Nick Stamenkovic, fixed income strategist at RIA Capital Markets in Edinburgh. "But the data today is of secondary importance to tomorrow's referendum."

Copyright Reuters, 2014

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imad_kueconomist@yahoo.com (Imaduddin)Managed FundsWed, 17 Sep 2014 16:42:00 +0000
China 10-year fin min bond yield at 4.13pc, lower than forecasts http://www.brecorder.com/business-a-finance/managed-funds/195539-china-10-year-fin-min-bond-yield-at-413pc-lower-than-forecasts.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/195539-china-10-year-fin-min-bond-yield-at-413pc-lower-than-forecasts.htmlimageSHANGHAI: China's Ministry of Finance auctioned 28 billion yuan ($4.56 billion) of 10-year bonds in the interbank market on Wednesday at an average yield of 4.13 percent, traders said, much lower than expected.

Market forecasts had centred around 4.27 percent and ranged from 4.23 to 4.30 percent.

The auction yield came in below Tuesday's benchmark secondary market yield of 4.2634 percent for 10-year government bonds.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui)Managed FundsWed, 17 Sep 2014 04:55:48 +0000
Treasuries prices gain ahead of Fed, Scottish votehttp://www.brecorder.com/business-a-finance/managed-funds/195445-treasuries-prices-gain-ahead-of-fed-scottish-vote.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/195445-treasuries-prices-gain-ahead-of-fed-scottish-vote.htmlimageNEW YORK: US Treasury debt prices rose on Tuesday as buyers fretted over possible shifts in America's ultra loose monetary policy and about the independence referendum in Scotland on Thursday, which could shake global markets.

As stock markets hit a one-month low before a U.S. Federal Reserve policymakers' meeting scheduled to begin Tuesday, prices of Treasuries moved up for a second straight session after a sustained selloff that ended on Friday.

"It's more of a tilt toward quality, as opposed to a flight to quality," said Wilmer Stith, fixed income portfolio manager at Wilmington Trust in Baltimore, Maryland.

The benchmark 10-year Treasury note yield, which stood at 2.613 percent on Friday versus 2.476 percent on Sept. 5, last yielded 2.576 percent on Tuesday. Price was up 3/32.

The 30-year bond was up 3/32 in price to yield 3.33 percent, while shorter maturities were also ahead or flat in early New York trading.

The Fed's two-day policymaking Federal Open Market Committee meeting will be watched for clues on the timing of the first rate hike in more than eight years.

"The market is just waiting with bated breath to see what comes out of the FOMC meeting tomorrow and followed, to a lesser degree, by the Scottish referendum," Stith said.

The Fed on Wednesday will also release economic and interest rate projections, extending its forecast horizon through 2017.

It has said it does not expect to raise rates until 2015, but recent strong data has led Fed officials to acknowledge they may need to act sooner than they thought just a few months ago.

On Thursday, Scottish voters will vote on ending their country's 307-year union with England, possibly breaking up the United Kingdom. The polls show the result is too close to call.

"It's a Pandora's Box. What does it mean for the UK and the EU? What does it mean for other regions, like Catalonia in Spain?" Stith asked. "It opens more uncertainties, and the last thing Europe needs is more uncertainty."

Copyright Reuters, 2014

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imad_kueconomist@yahoo.com (Imaduddin)Managed FundsTue, 16 Sep 2014 15:07:44 +0000
US Treasuries shorts at highest since late July: JPM surveyhttp://www.brecorder.com/business-a-finance/managed-funds/195444-us-treasuries-shorts-at-highest-since-late-july-jpm-survey.htmlhttp://www.brecorder.com/business-a-finance/managed-funds/195444-us-treasuries-shorts-at-highest-since-late-july-jpm-survey.htmlimageNEW YORK: The share of investors who are bearish on U.S. longer-dated Treasuries and reckon their yields will rise climbed to its highest level since late July, according to a J.P. Morgan Securities survey released on Tuesday.

The share of investors who said on Monday they are "short" longer-dated U.S. government debt rose to 42 percent from 36 percent the previous week.

This was the largest share of investors who were "short" Treasuries since July 28, the firm said.

By holding fewer longer-dated Treasuries, investors reduce the duration risk or sensitivity of their portfolios in anticipation of a rise in interest rates. A rate rise causes the prices of longer-dated bonds to fall more than the prices of shorter-dated debt, resulting in larger losses.

Conversely, longer-dated Treasuries produce higher returns than short-term debt in a market rally.

A steady flow of solid U.S. economic data helped push the benchmark 10-year Treasuries yield above 2.60 percent to its loftiest in two months on Monday.

A research paper from the San Francisco Federal Reserve published last week said investors expect the Fed to keep rates lower for longer, and to increase them more slowly, than U.S monetary policy makers themselves expect. It stoked worries the market might be underestimating how quickly the central bank might tighten policy.

The Federal Open Market Committee will begin a two-day policy meeting later Tuesday. There has been a growing view the Fed's policy-setting group would signal in a statement due at 2 p.m. (1800 GMT) on Wednesday that it is leaning to move away from its near zero interest rate policy by the end of 2015.

The share of long investors or those who said they held more longer-dated Treasuries than their benchmarks rose to 13 percent from 11 percent.

There are those investors who believe the U.S. economy is fragile and the Fed is not ready to send out a hawkish sign.

The share of neutral investors, or those who said they were holding long-dated securities equal to their portfolio benchmarks, fell to 45 percent from last week's 53 percent.

Copyright Reuters, 2014

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imad_kueconomist@yahoo.com (Imaduddin)Managed FundsTue, 16 Sep 2014 15:05:03 +0000