The Day Today

The Day Today 25 Sept

* Lew Says Investors May Be Too Hopeful on Debt-Limit Debate  {NSN MTNIT30D9L35 <GO>} “People have to take seriously the fact that Congress has a lot of work to do in a short period of time,” the Treasury Secretary said. * Old school filibuster from new Republican senator Ted Cruz who has pledged to fight against Obamacare “until I am no longer able to stand”  – but he’s merely delaying the inevitable passage of the bill

* Swedish Govt decides to sell 7% of outstanding stock in Nordea, ~SEK 22bn, to cut Govt debt ‘The Government’s role is to regulate the banks, not to own them” said Financial Mkts minister {NSN MTO7CJ1A1I4I <go>}

* China Beige Book Shows Slowdown in Contrast With Data {NSN MTNU4N1A74E9 <GO>}

* NZD monthly trade deficit hits 5 year high, -1.2bn NZD

* Abe’s trip to Wall Street today: * Cabinet secretary Suga promises economic package will not mean cutbacks in reconstruction {NSN MTNSWO1A1I4I <go>}

The Day Today 24 Sept

* Fed’s Fisher (non-voter) says it all: “Here is a direct quote from the summation of my intervention at the table during the policy “go round” when Chairman [Ben] Bernanke called on me to speak on whether or not to taper: “Doing nothing at this meeting would increase uncertainty about the future conduct of policy and call the credibility of our communications into question.” I believe that is exactly what has occurred, though I take no pleasure in saying so.”

* US Govt Shutdown now the focus, 2 WaPo articles: – What the next 8 days could bring – There’s much less time to avoid a shutdown than you think

* BoE Broadbent sticks to the Cool-as-a-Carney-cucumber plan, saying rates still very contingent on unemployment, but if jobs growth picks up then they would withdraw stimulus but “what’s not to like about lower unemployment?” {NSN MTL87S6K50YC <go>}

* ECB ready to use another LTRO, says Draghi, but more importantly he defends again the OMT, suggesting preparation continues apace for peripherals to return to the mkt: “No intention at all” for OMT “to address the fiscal problems of other countries” {NSN MTL32D6K50ZB <go>}

* With KRW at 8 month high: South Korea Signals Discomfort With Won’s Rise

* EUR/JPY up on M&A news that Japan’s Lixil Said to Discuss Acquiring (Germany’s) Grohe in 3 Billion-Euro Deal  {NSN MTLYOU6K50YS <go>}

The Day Today 23 Sept

* Merkel wins with the highest share of votes for the CDU since 1990, but the question is what coalition will she form

* 12 Fed speakers this week (!) but will we learn anything new. Key will be Dudley speech at 2.30pm LDN today * Fed’s George (sole dissenter) warns Fed credibility at risk as the decision “created confusion, created a disconnect” {NSN MTFNNP6TTDSH <go>} * Bullard wants 1.5% floor for inflation before hiking rates {NSN MTG0K51A1I4H <go>}

* All eyes still on Yellen as she cancels Oct 1st speech to the Economic Club of NY and Democrats round-up support {NSN MTFZX56K50XY <go>} * WSJ Hilsenrath: Yellen would bring Tougher Tone to Fed

* Roger Bootle: Reasons to be cheerful about the US recovery

* China HSBC Flash PMI rose to 6 month high 51.2

* Conference season in the UK, now the turn of the Labour Party, BBRG reports they plan Bigger Bank Levy to Extend Free Child Care {NSN MTKIX56JTSEC <go>}

The Day Today (Friday edition)

And so, it feels like we’re back to where we started. $/ZAR touched 9.55 yesterday, back to May 22nd levels before tapering chat began. While currencies are confused, stock mkts are still performing relatively well, though pausing while we digest whether no taper now means more taper later. Commentary all fairly negative on Bernanke (see below), with only armageddon-loving Ambrose Evans-Pritchard in support… Happy Friday!!

* Even WSJ Hilsenrath sounds perturbed: Fed’s Guidance Questioned As Market Misreads Signals * RTRS: The Fed’s messaging problem * FT: The snags in forward guidance start to show

* BOE Miles: “it may well turn out that the market is right”  {NSN MTDPP16JTSEF <go>}, “Strong GBP can help to lower inflation”

* IMF Lagarde underscores importance of US economy to rest of world and warns “global economic growth remains subdued”

* Buffett Says Federal Reserve Is Greatest Hedge Fund in History {NSN MTEIAN6TTDSL <go>} * Says equities are no longer cheap – “We’re having a hard time finding things to buy” {NSN MTE3CE1A74E9 <go>}

* Fulham FC reportedly furious as secret buyer of the Michael Jackson statue outside their ground is revealed as one J Mourinho

The (What taper?) Day Today 19 Sept

And so the world’s most important central bank blinks. They teed up the market for tapering and then claimed that ‘tightening financial conditions’ meant they have to wait and see. Stock markets duly rallied as the punchbowl remains and the party really is back in full swing. We thought the Greenspan put was strong, but the Bernanke put is even more explicit. Buy stocks, wear diamonds, and worry about how much harder the exit got, later…

* Global stocks jump to 5 year high, the Malaysian Ringgit strengthened the most since the post Asian crisis in 1998 {NSN MTD2VS6TTDSL <go>} * US 5yr rates fall the most since depths of armageddon March 2009 * Gold has best day since Jan 2009 * Dollar has worst day in a year – mixed for the USD as it gains against the JPY on cross-JPY “risk-on” buying

* Bank of Canada’s Poloz sees no housing bubble  {NSN MTC49Y6TTDSS <go>} * UK’s Osborne “Let’s not pretend there is a housing boom” {NSN MTD1YQAIH8N5 <go>}

* NZD previous GDP revised up from 2.4% to 2.7% and Q2 now 2.5% YoY

* Japan Aug exports +14.7% y/y but trade deficit for 14th month