Managed Funds Stay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.. Thu, 27 Nov 2014 02:32:00 +0000 SRA Framework 2.0 en-gb Russian FinMin sells 70mn rbls of OFZ bonds, avg yield 10.2pc

imageMOSCOW: Russia's Finance Ministry said on Wednesday it had sold 70 million roubles ($1.5 million) of OFZ treasury bonds at an average yield of 10.2 percent at a second of two auctions.

The ministry offered 5 billion roubles of OFZ bonds maturing in 2016 and said there was 520 million roubles of bids.

It earlier sold 603 million roubles of OFZ bonds maturing in 2023 at an average yield of 10.39 percent.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Wed, 26 Nov 2014 12:54:21 +0000
ECB says covered bond purchase total now 12.723bn euros imageFRANKFURT: The European Central Bank bought 2.238 billion euros of covered bonds last week, taking the total amount it has spent on such debt to 12.723 billion euros.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Mon, 24 Nov 2014 15:05:15 +0000
Indian bonds edge up on hopes of RBI's policy rate cut imageMUMBAI: Indian government bonds ended slightly higher in a range-bound session on Monday, as an unexpected interest rate cut in China was seen reinforcing the prospect that India's central bank would ease, possibly as early as next week.

Although most traders expect the Reserve Bank of India to cut rates in February, markets are bracing for a potential surprise at the review on Dec. 2.

At the very least, traders say they expect the central bank to adopt a more dovish tone.

China cut interest rates late on Friday in a bid to boost growth in the world's second-biggest economy. Although that is not expected to become a major factor in the RBI's thinking, traders say it still helps build the argument for easing in India.

More important to the RBI's thinking could be the July-September economic growth data due on Friday.

"Bonds will be range-bound up to policy, though GDP data should provide some momentum," said Baljinder Singh, a senior dealer with Andhra Bank in Mumbai, who sees the 10-year bonds in an 8.12-8.20 percent band.

The benchmark 10-year bond yield closed at 8.16 percent, down 1 basis point from its previous close. Easing consumer prices inflation has raised expectations for a rate cut, sending the 10-year bond yield down 12 basis points so far this month.

It hit a low of 8.14 percent last week, its lowest since Aug. 8, 2013.

In the overnight indexed swaps, the benchmark five-year swap rate closed down 6 basis points at 7.29 percent, the lowest since June 21, 2013.

The one-year rate ended down 5 basis points at 7.89 percent, its lowest since July 15, 2013.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Mon, 24 Nov 2014 13:36:15 +0000
Spanish yields below 2pc for first time as ECB bond buying eyed imageLONDON: Spanish 10-year bond yields broke on Monday below 2 percent for the first time as the prospect of the European Central Bank expanding its asset purchases to include government debt drove down euro zone yields.

Italian, Irish, French and Austrian yields also fell to fresh lows, extending last week's falls after ECB President Mario Draghi said on Friday that "excessively low" inflation had to be raised quickly by whatever means necessary.

This was his clearest signal yet that government bond purchases may not be far away.

It also echoed his 2012 pledge to do "whatever it takes" to save the euro, which sparked a two-year rally in euro zone sovereign bonds.

Data this week will show just how low inflation has fallen.

A Reuters poll forecasts a relapse to 0.3 percent in November, far below the ECB's near 2 percent target.

"We expect prices to go down further and this is something Draghi expects as well," said DZ Bank market strategist Felix Hermann. "Sure, there are still some opponents to his policy stance but I'm sure Draghi wouldn't be leaning out of the window that strongly if he knew there was no chance for a majority.

It's a clear sign that. QE is just behind the next corner." Spanish 10-year yields slid as low as 1.966 percent, while their Italian peers fell to 2.14 percent, both down 5 basis points on the day and shrinking their premiums over benchmark German debt near to 2010 lows.

Spain and Italy were seen as bailout candidates at the height of the debt crisis in mid-2012, since when their borrowing costs have slid from levels above 7 and 6 percent respectively.

Spanish yields are 35 bps below those of US 10-year Treasuries, the global benchmark, as the ECB prints money just as the Federal Reserve has wound up its bond purchases.

Goldman Sachs assigned a greater than 50 percent probability to the ECB expanding its purchases to sovereign bonds from secured debt.

"We would initiate a trade recommendation to go long a basket of 10-year Italian, Spanish and Portuguese government bonds versus a basket of German and French counterparts for a targeted spread compression of at least 50 basis points," the bank's strategists said in a note.

Bund yields were 1.4 bps up at 0.79 percent after German business sentiment rebounded in November but analysts said it was unlikely to change the overall downward trend in yields.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Mon, 24 Nov 2014 13:14:37 +0000
JGBs edge up, BoJ buying helps longer-dated maturities imageTOKYO: Japanese government bond prices edged up on Friday, lifted by slipping Tokyo shares and overnight gains in US Treasuries.

A regular operation by the Bank of Japan, through which large amounts of government debt is purchased for its monetary easing programme, also supported longer-dated JGBs.

The BoJ said on Friday it is buying 160 billion yen($1.36 billion) of JGBs with maturities of 25 years or longer.

The 30-year yield went as low as 1.355 percent, a trough not seen since April 2013.

Amply supported by the BoJ's debt purchases, longer-dated JGB yields have declined steadily this week despite the possibility of Japan raising the issuance of 30- and 40-year bonds.

The benchmark 10-year yield dipped half a basis point to 0.460 percent.

Tokyo's Nikkei skidded 0.9 percent as selling ahead of a long weekend and signs of short-term overheating offset a boost from a solid Wall Street performance.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Fri, 21 Nov 2014 14:47:02 +0000
Treasuries prices advance after weak China, euro zone data imageNEW YORK: US Treasury debt prices rose on Thursday, as investors sought the safety of government bonds amid concerns about global growth following weak manufacturing data from China and Europe.

Global stocks fell as a result, with risk appetite diminishing and pushing yields in safe-haven German bunds and U.S. Treasuries to the day's lows.

Data showing increased underlying U.S. inflation pressures last month and lower initial weekly jobless claims helped yields edge higher. But pessimistic data out of Europe and China outweighed the impact of sturdy U.S. data.

"This one snapshot of inflation doesn't undo all the potential headwinds in China, Japan, and Europe and certainly we'll wait and see if this becomes a trend rather than the exception," said Tyler Tucci, Treasury strategist, at RBS Securities in Stamford, Connecticut.

"It's a step in the right direction, but a step is all it is."

In mid-morning trading, benchmark 10-year U.S. Treasury notes were up 10/32 in price to yield 2.31 percent from 2.36 percent late Wednesday. Five-year notes were up 5/32, yielding 1.60 percent.

U.S. 30-year Treasury bonds were up 22/32 in price, with a yield of 3.02 percent, from 3.07 percent at the close on Wednesday.

Benchmark 10-year note and 30-year bond yields rose from the day's lows after data showed the core consumer price index, which excludes food and energy, rose 0.2 percent, the largest increase in five months.

A separate report showed first-time applications for unemployment benefits fell 2,000 to a seasonally adjusted 291,000 last week, staying below the 300,000 threshold for a 10th straight week.

"We have an improving labor market and a very subdued inflation situation," said Kim Rupert, director of fixed income at Action Economics in San Francisco.

"And it seems that even though the jobless numbers and some of the other economic data are pointing to the Fed hiking rates sooner rather than later, the inflation data remain too soft for them to hike rates."

Global markets were roiled earlier on reports showing weaker-than-expected manufacturing output in the euro zone and China's factory output contracting for the first time in six months.

Copyright Reuters, 2014

]]> (Imaduddin) Managed Funds Thu, 20 Nov 2014 16:04:30 +0000
Yields rise as markets brace for Fed minutes imageNEW YORK: US Treasury debt yields rose on Wednesday ahead of the release of minutes from the latest Federal Reserve meeting, which investors believed would show a central bank optimistic about the U.S. economy and ready to raise interest rates next year.

Treasuries were also pressured by the expected new issuance of Alibaba Group Holding's $8 billion corporate bond deal, traders said. Asset managers are selling Treasuries to make way for the Alibaba deal.

For now though, the focus has been on the Fed minutes to be released later in the session. Investors want to find out if the comments of the Fed committee members in the minutes affirm the more hawkish policy statement released more than two weeks ago.

"There's selling ahead of the Fed minutes," said Tom di Galoma, head of credit and rates trading at ED&F Man in New York. "There's a lot of pressure on the Fed to raise rates. And the consensus is that the Fed is looking to raise rates. Whether they do it or not is another question."

In mid-morning trading, benchmark 10-year U.S. Treasury notes were down 4/32 in price to yield 2.33 percent from 2.32 percent late Tuesday. Five-year notes were down 4/32, yielding 1.63 percent.

U.S. 30-year Treasury bonds were down 8/32 in price, with a yield of 3.05 percent, from 3.04 percent at the close on Tuesday.

Benchmark 10-year note and 30-year bond yields hit session highs after data showed starts for U.S. single-family homes rose for a second straight month in October and overall building permits approached a 6-1/2-year high.

But Craig Dismuke, chief economist at Vining Sparks in Memphis, Tennessee, was not as upbeat on the housing sector, although he noted that the stronger-than-expected permits boded well for next month's housing data.

He said since mortgage rates started to rise last May, almost every housing metric has flat-lined.

"We are on track for home price increases slowing to about 3 percent by year end," Dismuke said. "The Fed has to be cautious to not allow longer-term rates to rise because the housing recovery has stalled with this very small increase in mortgage rates."

Copyright Reuters, 2014

]]> (Imaduddin) Managed Funds Wed, 19 Nov 2014 16:55:17 +0000
JGBs extend gains after BoJ holds steady imageTOKYO: Japanese government bonds extended gains on Wednesday after the Bank of Japan held policy steady as expected and kept to its overall upbeat economic view - even with news this week that the economy had slipped into recession.

The BoJ said Japan's economy "continues to recover moderately as a trend" and voted to continue its purchases of government bonds and risky assets, maintaining its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen ($683 billion).

"At this point, the market feels like there is more downside risk in terms of the Japanese economy than upside risk, so that's why the JGB is basically strong," said Tadashi Matsukawa, head of fixed-income investments in PineBridge Investments in Tokyo.

On the supply side, the Ministry of Finance is considering increasing the issuance of 30- and 40-year Japanese government bonds by a total of 2 trillion yen in the new fiscal year starting in April, government officials with knowledge of the matter said on Wednesday.

The plan is aimed at taking advantage of current ultra-low yield levels to reduce the need for future debt rollovers as Japan's public debt continues to snowball.

The MOF's plan came as Prime Minister Shinzo Abe announced on Tuesday he would postpone a planned sales tax hike by 18 months to support the economy.

The 30-year JGB yield stood at 1.415 percent, down 5 basis points from the previous session, and from 1.445 percent earlier on Wednesday.

The 10-year yield shed 3 basis points to 0.470 percent , while the 20-year yield fell 5 basis points to 1.235 percent.

The yield on the two-year JGB fell one basis point to zero , meaning any further fall would put it in negative territory for the first time.

Japanese one-year government bills were sold for the first time at negative yields on Tuesday, underlining strong demand for the debt under the BoJ's qualitative and quantitative easing policy.

Lead 10-yr Dec JGB futures ended up 0.25 point at 146.30.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Wed, 19 Nov 2014 08:11:11 +0000
Treasuries prices inch higher after tame core US producer prices imageNEW YORK: US Treasury debt prices edged higher in choppy trading on Tuesday after a core inflation measure showed just a tepid rise in prices last month, which suggested the Federal Reserve could take its time raising interest rates.

Yields, which move inversely to prices, were much lower following the release of the stronger-than-expected U.S. producer prices data but edged up from their troughs, indicating a market lacking any strong conviction trade.

German Bund yields hovering near record lows have also weighed on their U.S. counterparts. Benchmark U.S. yields have declined in three of the last four sessions.

U.S. data on Tuesday showed producer prices unexpectedly rose in October, but a broader measure, which excludes food, energy and trade services, remained benign, inching up just 0.1 percent last month.

"The headline was firmer than expected, but the sub-text reveals no inflation pressures and are closer to the traditional way we looked at PPI," said David Ader, head of government bond strategy at CRT Capital in Stamford, Connecticut.

In mid-morning trading, benchmark 10-year U.S. Treasury notes were last up 3/32 in price to yield 2.32 percent from 2.34 percent late Monday. Five-year notes were up 1/32, yielding 1.61 percent.

"Treasuries continue to be attractive versus our trading partners," said David Coard, head of fixed income sales and trading at Williams Capital in New York. "We have backed off from the lows in 10-year yields that we saw a month ago, so people see value here."

U.S. 30-year Treasury bonds, meanwhile, were up 7/32, with a yield of 3.04 percent, from 3.06 percent at the close on Monday.

CRT's Ader said while the United States looks in decent shape compared to the euro zone and Japan, the monetary policies for these countries reflected the fact their economies cannot stand on their own two feet.

"This may help explain why yields remain so low in general and specific to the U.S., reflect the global influence as much if not more than the pure domestic story," said Ader.

Copyright Reuters, 2014

]]> (Imaduddin) Managed Funds Tue, 18 Nov 2014 15:44:18 +0000
Turkey's 2-year benchmark bond yield falls below 8pc, year low imageISTANBUL: Turkey's benchmark bond yield fell below 8 percent on Tuesday, its lowest in a year, as markets started to price in easing from the Turkish central bank in the coming period with a lower inflation outlook for next year.

The 2-year government bond yield fell to 7.99 percent from 8.08 percent on Monday.

The central bank said last month that elevated food prices are delaying the improvement in the inflation outlook, yet falling commodity, especially oil, prices, are expected to support disinflation foreseen for the next year. "The market is preparing itself for a rate cut in the coming period from the central bank.

It's not being priced in the lira yet but short-term bonds are pricing in a 100 basis point reduction in interest rates in the coming 3-6 months," said a banker.

The central bank will meet on Thursday for its monthly rate setting meeting, but economists forecast that high inflation will mean no change to interest rates this month. Turkey is struggling to control inflation which is well above the central bank's year-end target of 5 percent, while economic growth is faltering.

Investors are also eyeing Standard & Poor's credit note, due on Friday, with bankers saying that a positive surprise from the rating agency is seen as more likely than a negative one.

S&P - which rates Turkey at BB+ with a negative outlook - is the only one of the three major rating firms that does not class Turkey as investment grade.

S&P said last year it had failed to reach a deal to offer a full rating for Turkey and would only issue "unsolicited" assessments - meaning it is not paid by Turkey to provide coverage but does so anyway to meet investor needs. The lira was firmer at 2.2219 by 0900 GMT from 2.2280 against the dollar late on Monday, while the 10-year government bond yield was unchanged at 8.46 percent.

Markets also eyed treasury debt auctions on Tuesday.

The treasury will sell a new 2-year benchmark bond and tap a 10-year fixed-coupon bond.

The Istanbul stock index was up 0.45 percent at 80,863.42 points, outperforming the broader MSCI emerging markets index, which was down 0.07 percent.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui) Managed Funds Tue, 18 Nov 2014 09:53:01 +0000