News 

10-year Treasury yield surges to highest level since early 2014

“The 10-year Treasury yield hit its highest level since January 2014, nearing the critical 3pc milestone, on signs the US Federal Reserve looks set to hike interest rates at least two more times this year” writes Alan Kirkland for telegraph.co.uk. The yield on the 10-year Treasuries – the benchmark borrowing cost for international finance – hit 2.96pc, up 5 basis points, on Friday evening.Bond prices also move in an opposite direction to interest rates and the surge in yields on Friday came on the back of comments by Fed governor Lael Bainard that the…

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Accountants Confident in U.S. Economic Outlook

“Vaidyanathan said, is the boost that has come from low interest rates at central banks seeking to foster economic growth” writes Ezequiel Minaya for wsj.com. Globally, economic confidence is at its strongest since the inception of the survey in 2009.According to the Organization for Economic Cooperation and Development, which tracks 35 member countries from the Americas to Europe and Asia, the short-term outlook is for stable growth overall.US President Donald Trump arrives to speak about tax cuts during an event with American workers in the Rose Garden of the White…

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Markets News Oil Regulators 

There’s an ‘interesting phenomenon’ happening with crude, and it could be sending a signal to bonds

“We have this interesting phenomenon where crude oil is highly correlated to the direction of inflation expectations,” Bilello told CNBC’s “Trading Nation” on Thursday” writes unknown author for cnbc.com. The Federal Reserve is sure to hike interest rates again this year, but the key question is how many times.Since 2016, crude oil has made a roughly 160 percent advance, picking up speed this year, and inflation expectations have risen alongside it.From 2014 to 2016, for example, when the oil glut pushed crude below $30 a barrel, inflation expectations also tumbled.”The…

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Does medical marijuana decrease opioid use or boost it?

“Studies conducted at the state level show that expanding access to medical marijuana is correlated with lower rates of opioid misuse and overdose” writes Keith Humphreys Is for washingtonpost.com. In the meantime, the medical marijuana debate will rage on, with many people on each side citing as authoritative whichever study suits their purposes.More studies like Cooper’s are needed and should become more common if Congress is wise enough to loosen restrictions on medical marijuana research.Yet studies of individuals show that using medical cannabis is correlated with higher rates of using…

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Tax law boosts bank returns

“So have the banks finally turned the corner?” writes Michael Rapoport for marketwatch.com. But that 13% would have been 11.8% without the earnings boost of more than $2.8 billion the six banks collectively received because of the decline in their tax rates from a year ago, driven by the new tax law.While the banks’ first-quarter ROEs were strong, a significant chunk of the strength stemmed not from growth in the banks’ operations, but from the sharply lower tax rates they’re now enjoying because of the federal tax overhaul enacted in…

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News Regulators 

Fate of the single currency to be decided by forthcoming ECB meeting

“The impressive growth of the global economy throughout 2017 helped to boost this trade surplus” reports forexlive.com. The weakening of the single currency between 2011 and early 2017 led to a growth in the foreign trade balance, from near zero to a monthly average of 20 billion.Despite the perennial lows in the unemployment rate, and the impressive growth rates of the economy, the ECB is unlikely to rely on strong domestic demand as a driver for inflation.Article provided by FxPro, an industry-leading online broker regulated by the FCA. Weak inflation…

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Markets News Stocks 

Stock market trades near session lows as rise in U.S. government bond yields spooks Wall Street

“In other, higher yields can mean higher costs for U.S. corporations” writes Mark Decambre for marketwatch.com. LeBas said higher inflation expectations, notably fueled by a rise in crude-oil futures CLK8, +0.22% also was nudging yields on long-dated government debt higher.The Dow Jones Industrial Average on Thursday was trading near the lows of the session as a steady rise in the rates of long-dated Treasurys weighed on buying appetite for stocks.However, the jump in yields was causing a broader reassessment of of equity values against other asset considered less risky, market…

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Markets News Oil 

There are good reasons to put money in emerging markets , says bond strategist

“Rising interest rates make it harder for governments and companies in emerging markets to service their debt, especially those denominated in the U.S. dollar” writes Yen Nee Lee for cnbc.com. Nicholson argued that the Fed will not raise rates aggressively — creating a situation that many emerging nations can handle.Emerging markets look like they could be at the losing end when the U.S. Federal Reserve raises interest rates and when oil prices climb, but there are still enough reasons to invest in bonds from developing countries, Bank of Singapore said…

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Markets News 

Inflation is the ‘mother of all risks’ to the market now, Deutsche Bank says

“Earlier this month, inflation numbers came in hotter than anticipated, signaling inflation pressures could be mounting” writes unknown author for cnbc.com. The expectation for higher inflation is not out of line with consensus opinion.Rising inflation is the single biggest risk to investors now, according to an analysis from Deutsche Bank.”I think inflation is the mother of all risks here,” Torsten Slok, the firm’s chief international economist, said Tuesday in an interview on CNBC’s “Trading Nation.”. The worry here really is that if inflation does overshoot to the upside, and the…

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Surge in risky loans leaves global economy vulnerable to rate hikes, IMF warns

“Low interest rates and surging economic growth have stoked a boom in risky lending which could turn sour as interest rates rise, potentially derailing global growth” writes Tim Wallace for telegraph.co.uk. Even low-quality borrowers are able to issue bonds at very low interest rates, the International Monetary Fund said, leading to a spike in poorly-rated bond issuance.Loans to heavily indebted or even junk-grade borrowers have also shot up – $788bn (£554bn) of so-called leveraged loans were issued last year, smashing through the pre-crisis record of $762bn in 2007. The amount…

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