Good Morning,
Worth noting is the impressive pace of Chinese economic growth in 2009, a year considered extremely challenging for most of the world economies. Whereas Mexico contracted 7% last year (after an unfortunate “trifecta” of lower oil revenues, lower money transfers from the US and the H1N1 flu affecting tourism), China grew an outstanding 10.70% and is now surpassing the US as the world’s biggest car consumer. It’s projected China will surpass Japan to become the world’s second largest economy this year…
Worth noting is the impressive pace of Chinese economic growth in 2009, a year considered extremely challenging for most of the world economies. Whereas Mexico contracted 7% last year (after an unfortunate “trifecta” of lower oil revenues, lower money transfers from the US and the H1N1 flu affecting tourism), China grew an outstanding 10.70% and is now surpassing the US as the world’s biggest car consumer. It’s projected China will surpass Japan to become the world’s second largest economy this year…
Treasury prices rose on Wednesday as disconcerting news from some financial firms and concerns abroad (China and Greece were in the spotlight) made investors seek the safety of Treasuries and sell some of their equity positions. For the record, Chinese authorities announced that they have requested some banks to curb lending as they worry their economy could overheat. This news could have a negative effect on other global economies as a drop in production could affect companies in the natural resources and construction sectors. Also, Greece is facing debt pressures with a deficit four times the European Union limit and debt at 113% of their annual output, there is also uncertainty as to whether the European Union will step in and help. On the financial side, both Bank of America and Morgan Stanley disappointed investors with weaker than expected earning results The Dow Jones Industrial Average dropped 122 points to close at 10,603. Treasuries rallied, especially the intermediate and long range, as a consequence of this. The 2-year note rose 1/32 to yield 0.87% while the 5-year gained 5/32 yielding 2.41%. The benchmark 10-year Treasury rose 11/32 yielding 3.65% while the 30-year bond 27/32 to yield 4.53%.
Treasuries are trading lower this morning as market participants react to a stronger than expected Chinese 4Q ’09 GDP results and positive news from Greece clarifying that its government will not need an aid package from the European Union. China’s gross domestic product for the last quarter of 2009 beat analysts’ estimates at 10.70% vs. the expected 10.50%. The country grew an impressive 8.70% for the entire year. Additionally, unemployment concerns continue to take center stage here in the United States and this morning’s worse than expected data in the Initial Jobless Claims report would only keep the spotlight in the labor market. The 2-year note has declined 1/32 to yield 0.89% while the 5-year note has dropped 5/32 yielding 2.45%. The 10-year Treasury is currently trading 6/32 lower to yield 3.67% while the long bond has dropped 6/32 to yield 4.55%. This, in spite of the Department of Labor’s release of its weekly Initial Jobless Claims report showing that claims rose 36,000 in the previous week to 482,000. Analysts had expected a drop from last week’s number to 440,000. However the Department of Labor clarified that the jump in claims is “Administrative not Economic”.
The number of Continuing Claims dropped 18,000 to 4.599 million, in line with what was expected. The less volatile 4-week average number of initial claims also disappointed showing an increase of 7,000 from the reported 441,250 for the previous week. In other economic releases for the day, the Leading Economic Indicators, a composite index of ten economic indicators designed to predict economic activity six to nine months in the future, will be released at 9 am CST. Analysts are forecasting the index to report a 0.7% change for the month of December. The Philadelphia Fed will also be releasing its index at 9:00 am CST. Analysts are expecting another positive reading for the month of January at 18.00 (the 5th in a row).
Treasuries are trading lower this morning as market participants react to a stronger than expected Chinese 4Q ’09 GDP results and positive news from Greece clarifying that its government will not need an aid package from the European Union. China’s gross domestic product for the last quarter of 2009 beat analysts’ estimates at 10.70% vs. the expected 10.50%. The country grew an impressive 8.70% for the entire year. Additionally, unemployment concerns continue to take center stage here in the United States and this morning’s worse than expected data in the Initial Jobless Claims report would only keep the spotlight in the labor market. The 2-year note has declined 1/32 to yield 0.89% while the 5-year note has dropped 5/32 yielding 2.45%. The 10-year Treasury is currently trading 6/32 lower to yield 3.67% while the long bond has dropped 6/32 to yield 4.55%. This, in spite of the Department of Labor’s release of its weekly Initial Jobless Claims report showing that claims rose 36,000 in the previous week to 482,000. Analysts had expected a drop from last week’s number to 440,000. However the Department of Labor clarified that the jump in claims is “Administrative not Economic”.
The number of Continuing Claims dropped 18,000 to 4.599 million, in line with what was expected. The less volatile 4-week average number of initial claims also disappointed showing an increase of 7,000 from the reported 441,250 for the previous week. In other economic releases for the day, the Leading Economic Indicators, a composite index of ten economic indicators designed to predict economic activity six to nine months in the future, will be released at 9 am CST. Analysts are forecasting the index to report a 0.7% change for the month of December. The Philadelphia Fed will also be releasing its index at 9:00 am CST. Analysts are expecting another positive reading for the month of January at 18.00 (the 5th in a row).
No comments:
Post a Comment