Thought of the Day

18-NOV-09 Emerging Markets
The four times over subscribed record $8B emerging market issue by the government of Qatar highlights the insatiable quest for higher yielding assets amid a negative real Fed funds rate.

16-NOV-09 United States
Consumer spending's far from robust, but the rising trend of retail sales is sufficient for the purpose of extending 2009's narrowing of credit risk premia.

13-NOV-09 United States
The thinning of corporate credit risk premia and accompanying climb by share prices should continue until the perceived risk of a double-dip deems otherwise.

12-NOV-09 United States
The now declining trend of homebuyer mortgage applications warns of an end to ongoing recovery by home sales that would put renewed downward pressure on home prices.

11-NOV-09 United States
China now compensates for private-sector deleveraging in the US.

10-NOV-09 United States
Firming of the equity market boosts the outlook for corporate credit.

09-NOV-09 United States
Sharply higher share share prices, a lower VIX, and slightly lower Treasury bonds bring into view new 2009 lows for various credit risk premia.

06-NOV-09 United States
Unless the declining trend of jobless claims is reversed, the unemployment rate is close to forming a peak, perhaps at 10.5%.

05-NOV-09 United States
Combining the pronounced shrinkage of unit labor costs with a competively priced dollar exchange rate ought to boost the global demand for US-based output considerably.

04-NOV-09 United States
In the off-year elections, Americans voted against a much expanded role for government in the US economy.

03-NOV-09 United States
US economic data continue to either meet or exceed expectations, but the recovery may not become self-sustaining until payrolls expand convincingly.

02-NOV-09 United States
November started off on a positive note that should continue into 2010 ... Look for a shallower than expected loss of jobs for October.

30-OCT-09 United States
Nervous investors were spooked by ghosts of a double-dip this Halloween eve ... a semblance of calm should return shortly.

29-OCT-09 United States
Real GDP's 3.5% advance of Q3-09 was faster than what underlying fundamentals are capable of sustaining.

28-OCT-09 United States
The latest climb by VIX implies that the high yield bond spread may soon widen to more than 700 basis points, but another narrowing should commence by December.

27-OCT-09 United States
Consumer spending's limited upside underscores the importance of keeping interest rates low, especially once tax hikes materialize.

26-OCT-09 United States
The latest sell-off of equities amid generally improved soundings on business activity follows from a healthy sense of skepticism.

23-OCT-09 United States
Recent evidence favors a passable economic recovery, but help from Washington may still be required.

22-OCT-09 United States
Equity strength helps to boost risk tolerance ... but, as inferred from the unexpected decline by August's FHFA home price index, both consumers and lenders remain anxious.

21-OCT-09 United States
If Treasury yields continue to climb higher amid declining share prices and a sinking dollar exchange rate, a major change in policy may be in order.

20-OCT-09 United States
PPI showed inflation to be well contained despite cheaper dollar ... Starts dimmed chances of a V-shaped recovery.

19-OCT-09 United States
Both stocks and corporate bonds now advance in anticipation of a rising trend for business revenues.

16-OCT-09 United States
Exports may explain why Septenber's increase in production surpassed expectations ... meanwhile VIX sank to its lowest close since September 3, 2008.

15-OCT-09 United States
Enhanced liquidity has balanced high yield upgrades with downgrades thus far in October and might turn a "jobless" into a "jobs-full" recovery by early 2010.

14-OCT-09 United States
"Dow 10K" could supply an important psychological lift and help to lower risk aversion to levels that are consistent with the economy's long-term growth potential.

13-OCT-09 United States
Just as home prices firm, the prices of a broad array of goods and services might soften by enough so that the annual rate of core inflation dips to 1%.

12-OCT-09 United States
Sharp drop in fallen-angel downgrades follows from fewer reductions of US corporate credit ratings.

09-OCT-09 United States
Wide credit risk premia, a most vulnerable real estate market, and a weak banking sector imply that a Fed rate hike does not impend.

08-OCT-09 United States
Because of the recession's much deeper setback by sales compared to the still agonizing contraction of payrolls, a steadying of payrolls does not yet impend.

07-OCT-09 United States
The latest Treasury bond rally probably better predicts what awaits the US economy than does the recent gold price surge.

06-OCT-09 United States
Current dollar exchange rate deprciation will do more to boost spending on US output than to add to inflation risks.

05-OCT-09 United States
Avoidance of a double dip recession requires a further recovery by financial asset prices, without which the supply of credit will prove inadequate.

02-OCT-09 United States
Although September's jobs report refuted the nearness of a V-shaped recovery, it did not signal the approach of another recession.

01-OCT-09 United States
After learning of September's record deep monthly plunge by auto sales, stunned investors began to see "W's".

30-SEP-09 United States
Recent data underscore the sketchy nature of the current recovery ... A limp upturn will leave many behind.

29-SEP-09 United States
Worry over income and jobs lowered consumer confidence, which threatens recent progress at home price stabilization.

28-SEP-09 United States
Higher financial asset prices benefit credit quality and should help to firm spending by both businesses and households.

25-SEP-09 United States
The ISM and regional indices imply manufacturing is doing better than what otherwise might be inferred from August's durable goods orders ... latest drop in benchmark Treasury yield will push 30-year mortgage yield under 5%.

24-SEP-09 United States
Jobless claims' declining trend suggests that the recovery by home sales will continue.

23-SEP-09 United States
The FOMC's latest policy statement implicitly recognized that the US economy is not yet strong enough to do without extraordinary assistance from Washington.

22-SEP-09 United States
The Fed's much more worried about real estate price deflation than about more conventional measures of price inflation ... Low inflation expectations allow the Fed to focus keenly on the economy's considerable downside risks.

21-SEP-09 United States
Recent trends in corporate credit rating revisions favor a thinner high-yield bond spread and a declining default rate starting in December 2009.

18-SEP-09 United States
The 12-month return from high-yield corporates may reach 50% by year's end, implying that a 30% yearlong climb by the market value of common stock is not implausible.

17-SEP-09 United States
The V-shaped recovery of financial asset prices should help to sustain at least an uninspiring recovery for the real economy.

16-SEP-09 United States
The CFOs' wage expectations switched from one of contraction to a mild expansion, which lessens the risk of a ruinous deflation of employment income.

15-SEP-09 United States
As investor risk aversion subsides, the confidence of both businesses and consumers will rise.

14-SEP-09 United States
Dollar exchange rate depreciation will be of a net benefit to credit up until it puts unwanted upward pressure on Treasury bond yields.

11-SEP-09 United States
Risk aversion has yet to ease by enough to support forecasts of robust expenditures.

10-SEP-09 United States
Treasury bond yields might again surprise on the downside during the early phase of an economic recovery.

09-SEP-09 United States
In a way that would please Bo and Woody, financial asset prices continue to rise in a manner that might best be described as "three yards and a pile of dust".

08-SEP-09 United States
Today's contraction of household debt, increase in personal savings, steadying of home prices, and financial asset price rallies all imply a climb by household net worth that will boost consumer spending by 2010.

04-SEP-09 United States
August's jobs report was indicative of a recuperating economy that's still not strong enough to grow without extraordinary assistance from Washington.

03-SEP-09 United States/Emerging Markets
According to the ISM composite, medium-grade industrial company bonds are priced more aggressively than are high yield bonds.

02-SEP-09 United States
Occassional spending reversals that are implicit to an anemic revovery will prompt temporary price reversals for equities and corporate bonds.

01-SEP-09 United States
A healthy sense of skepticism sank stocks despite good economic news ... If August's ISM manufacturing index holds, both equities and corporate bonds will advance sharply.

31-AUG-09 United States
The arguable overvaluations of both equities and corporate bonds ought not to be confused with favorable 12 month outlooks.

28-AUG-09 United States
A record low capacity utilization rate allows firms to increase output without new capital investment, compounding the weak growth trend led by a dismal pace for consumer spending.

27-AUG-09 United States
With household net worth now growing and home prices leveling off, the current quarter will show the first positive result for residential investment since Q4 2005.

25-AUG-09 United States
Given Ben Bernanke�s knowledge of The Great Depression, his reappointment lessens the top risk factor for a double dip recession � premature policy tightening that snuffs out the nascent recovery.

21-AUG-09 United States
If home sales continue to recover, business sales ought to grow by what's necessary to extend yield spread narrowing.

20-AUG-09 United States
A recovery by home sales will blunt the unfinished climb of the mortgage non-payment rate.

19-AUG-09 United States
Despite the surge in federal debt, total US debt decelerates, where the latter helps to improve the near-term inflation outlook.

18-AUG-09 United States
Just because the equity and corporate credit markets get ahead of themselves doesn't imply that their current expectation calling for the return of sales growth is wrong.

17-AUG-09 United States
The latest equity market sell-off suggests that investors may be more worried about the fate of weakened regional banks than is commonly thought.

14-AUG-09 United States
Recent worry over the near-term adequacy of business sales may be overdone ... still, companies must heed the creditworthy consumer's demand for attractive prices.

13-AUG-09 United States
Sustaining 2009's rallies in credit and equities requires more in the way of the faster growth of business sales vis-a-vis inventories.

12-AUG-09 United States
An especially accommodative Fed policy will help the economy avoid a relapse as it recuperates from a harsh recession.

11-AUG-09 United States
For profits to thrive and, thereby, extend 2009's rallies in credit and equities, a recovery by corporate revenues is mandatory.

10-AUG-09 United States
Barring an adverse shock or policy errors, a double dip will be avoided ... Stock and credit rallies improve outlook for business debt repayment.

07-AUG-09 United States
July's employment report suggests that consumer spending might continue to grow after "cash for clunkers" expires.

06-AUG-09 United States
The ongoing narrowing of bond yield spreads and 2010's outlook for high-yield defaults improve next year's business prospects regardless of what befell payrolls in July.

05-AUG-09 United States
The evidence favors an anemic economic recovery that still has corporate credit risk premia narrower 6 to 12 months hence.

04-AUG-09 United States
The fifth straight monthly increase by the index of pending home sales strengthened the case for an economic recovery ... 2009's narrowing of credit risk premia has been something more than fanciful.

03-AUG-09 United States
According to July's ISM manufacturing index, not only is the recession over, but the high yield bond spread could narrow by another 100 to 200 basis points.

31-JUL-09 United States
Consumer spending and a restocking of inventories will allow business sales to grow sequentially in Q3-09 ... but, growth may have a hollow ring absent ample recurring gains in productivity.

30-JUL-09 United States
The latest batch of state jobless benefits data brought the next economic recovery into view.

29-JUL-09 United States
Homebuyer mortgage applications have yet to bottom decisively, while any firming of new orders is both tentative and incomplete.

28-JUL-09 United States
Credit losses will be lower than otherwise, the more quickly home price deflation ends.

27-JUL-09 United States
The refusal of the 10-year Treasury yield to sink amid the ongoing contraction of employment income warns of a possible relapse for home sales.

24-JUL-09 United States
The narrowing of corporate bond yield spreads is far from over ... Encouraging news from abroad reinforces expectations of a fast approaching US economic recovery.

23-JUL-09 United States
More evidence of a bottom for housing, as well as signs of fewer job losses and a smaller rise by unemployment, lessened investor risk aversion.

22-JUL-09 United States
A constructive narrowing of corporate credit risk premia should continue absent destructive shocks or policy miscues ... horrendous sales results are more likely to improve than to worsen.

21-JUL-09 United States
Deep year-over-year declines by business sales improve propsects for corporate revenue growth going forward ... as gloom becomes more deeply entrenched, major upside surprises will be easier to come by.

20-JUL-09 United States
Be it the LEI or ECRI, the leading indicators signal an impending end to recession ... The economy's improved tone should be sufficient for a narrowing of spreads even if material jobs growth doesn't return until H2-10.

17-JUL-09 United States
To the surprise of many, housing may bottom fairly soon ... 2009's credit market rally got it right regarding the nearness of an economic recovery.

16-JUL-09 United States
Dr. Doom now agrees with the credit market in that recession's end draws near.

15-JUL-09 United States
Hints of a Q3-09 bottom for industrial production complement notions of a Q4-09 peak for the US' high-yield default rate.

14-JUL-09 United States
June's PPI grossly overstated underlying price inflation ... In 2009's second half, core CPI inflation should be flat-to-lower, while both total and core retail sales grow sequentially.

13-JUL-09 United States
As shown by 1993 and 2003, financial markets can perform quite well despite a subpar performance by employment ... The avoidance of deepening job losses is more important than a substantial expansion of payrolls.

09-JUL-09 United States
Along with other labor market metrics, the declining trend of jobless claims diminished the meaning of June's unexpectedly deep loss of jobs ... Fewer jobless claims complement the narrowing trend of corporate credit risk premia.

08-JUL-09 United States
Plunge by 10-year Treasury yield improves housing's outlook ... Projected Jun-09 to Jun-10 drop by high yield default rate bodes well for corporate bonds, stocks and economy.

07-JUL-09 United States
A lack of meaningful technological progress helps explain the decidedly weak state of developed economies ... The good news is that a new Dark Age will be avoided.

06-JUL-09 United States
Data favor a narrowing of monthly job losses ... Corporate credit has opened the way for higher equity prices.

02-JUL-09 United States
Forget about jobs, the labor market's leading indicators portend an improved economy, including a Q3-09 end to recession

01-JUL-09 United States
June's auto sales lagged expectations and mortgage applications sank ... all of Washington needs to do more to keep the 10-year Treasury yield low.

30-JUN-09 United States
Until business sales well exceed expectations, a lack of job opportunities and a weak income outlook will weigh on consumer confidence

29-JUN-09 United States
A radical switch in the reported yearly change of Saturn's unit sales from the 58% plunge of January-May 2009 to June's 35% advance is but one bit of evidence pointing toward a summertime end to recession.

26-JUN-09 United States
ECRI's leading index and consumer confidence hint of recession's imminent demise, yet shrinkage of employment income and still rising unemployment signal an anemic revovery.

25-JUN-09 United States
On June 25, VIX's close was the lowest since September 12, 2008 -- or just before all you-know-what broke loose globally.

24-JUN-09 United States
Equity prices will climb sharply higher once shares more fully price in 2009's major rally by corporate bonds.

22-JUN-09 United States
Will another "October 19, 1987" be what it takes to get Washington to address issues regarding the long-term fiscal condition of the US government?

19-JUN-09 United States
High yield bonds may now be overvalued, but spreads could narrow significantly once the next economic recovery commences, perhaps by year-end 2009.

18-JUN-09 United States
Recent data suggest the imminence of recession's demise ... but core inflation should ease amid an anemic economic recovery.

17-JUN-09 United States
In response to a lower rate of core CPI inflation, benchmark Treasury yields eventually will break under 3.5% again.

15-JUN-09 United States
Stock prices plunged partly because of how Treasury yields had risen to levels that threaten to prevent a recovery by home sales.

12-JUN-09 United States
Look for home price deflation fears to again shove aside whatever unease investors have about CPI inflation.

11-JUN-09 United States
The avoidance of Armageddon does not assure the approach of a V-shaped recovery ... Treasury bond yields still might return to their lows of 2003.

09-JUN-09 United States
Inflation fears are badly overdone ... Average wage will rise by no more than 1.3% yearly by Q1-10, which will facilitate recovery by profits.

08-JUN-09 United States
Fed may not hike rates until an extended shrinkage of bank credit losses is underway ... A sustainable climb by CPI inflation may be impossible amid wage and salary disinflation.

05-JUN-09 United States
Provided that jobless claims extend their declining trend, monthly job losses will continue to narrow and the unemployment rate's climb will moderate.

04-JUN-09 United States
The declining trend of jobless claims matters more to the outlook than a likely rise by the unemployment rate from April's 8.9% to at least 9.2% in May.

03-JUN-09 United States
The thinnest investment-grade CDX spread in nearly a year and the 28% 2009-to-date total return from high-yield bonds suggest a considerable upside potential for equity prices during the remainder of 2009.

02-JUN-09 United States
More often than not, new data improves the outlook and suggests that an economic upturn will emerge by Q4-09.

01-JUN-09 United States
Both in the US and abroad, the PMI indices point toward a possible summertime end to the current global recession ... Market value of US common stock soon will catch up to the much improved performance of high-yield corporate bonds.

29-MAY-09 United States
Latest sell-off of Treasuries suggests that unless the economy dives sharply lower again, Washington should either significantly downsize long-term spending proposals or substantially increase proposed taxes in order to avoid a debilitating climb by benchmark Treasury yields.

27-MAY-09 United States
Stocks sold off in response to a surge in benchmark Treasury yields that owes much to expectations of an improving economy ... Jump in US government borrowing is being offset by record plunge in short-term business debt.

26-MAY-09 United States
Confidence is contagious ... May's unexpected jump in consumer confidence prompted an increase in investor confidence.

22-MAY-09 United States
The week of May 29 will be chock full of housing-related data that just might disappoint ... If the housing numbers top expectations, both a bottoming of credit losses and recession's end will come into view.

21-MAY-09 United States
The worst of the global recession probably is over ... Once US imports grow again, so will the rest of the world's demand for US Treasury bonds ... Washington must place economic growth ahead of almost everthing else.

20-MAY-09 United States
The FOMC's tentative view of an improving economy is warranted, nonetheless growth's return impends according to the anecdotal evidence, while the latest surge in Baa-grade and high-yield bond issuance reinforces a modest sense of optimism.

19-MAY-09 United States
The 10-year Treasury yield will follow home sales ... If home sales have bottomed then so has the benchmark Treasury yield.

18-MAY-09 United States
An easing of credit market conditions improves the economic outlook, where the latter can only further enhance access to credit ... May's high-yield bond issuance could reach a range of $15 to $20 billion.

15-MAY-09 United States
Real estate price deflation must end, even if doing so requires a somewhat faster rate of CPI inflation than otherwise.

14-MAY-09 United States
Despite a much narrower rate gap between 3-month Libor and fed funds, financial company bond yield spreads remain extraordinarily wide.

13-MAY-09 United States
Retail sales will recover quickly from April's unexpectedly deep setback ... Record non-oil import price deflation supports more aggressive Fed action on mortgage yields ... Homebuyer mortgage applications and foreclosures disappointed.

12-MAY-09 United States
The latest surge in corporate bond issuance shows that the credit crunch is easing by enough to expedite the return of economic growth.

11-MAY-09 United States
High yield spreads now seem unsustainably thin, while a further narrowing of investment-grade spreads appears warranted.

08-MAY-09 United States
Now that the bank stress tests are out of the way if extended auto plant shutdowns are transcended and if home sales grow, the recession should expire by September.

07-MAY-09 United States
Owing to a disinflationary deceleration of wages, the latest climb by Treasury bond yields will be fundamentally justified only if the current recession expires by August 2009.

06-MAY-09 United States
Contrary to the popular view, the consensus expects that sequential growth will return to real GDP by Q3-09.

05-MAY-09 United States
The recent pick up in high yield issuance generally has refinanced outstanding debt, sometimes to the benefit of the credit standing of bank loan programs.

04-MAY-09 United States
Despite 2009-to-date's ample returns from high-yield corporate bonds, credit risk premia have yet to narrow to widths that otherwise would indicate an end to enervating risk aversion.

01-MAY-09 United States
The Fed's expanded tool kit can facilitate a quick reversal of a possibly fundamentally unwarranted climb by the 10-year Treasury yield ... Leading indicators seem to be turning positive, on balance.

30-APR-09 United States
In view of very low mortgage yields, forthcoming fiscal stimulus and seemingly unsustainably low expenditures, the worst probably has passed.

29-APR-09 United States
As long as the worst has passed, the huge scope for operating leverage implicit to now very low rates of capacity utilization suggests that the investment performance of equities may approach 09-to-date's 15% total return from high-yield bonds.

28-APR-09 United States
The FOMC's upcoming policy statement will recognize implicitly the overriding need to contain price deflation ... Real estate linked credit losses are the consequence of real estate price deflation.

27-APR-09 United States
Beware of black swans ... A flu pandemic that takes hundreds of thousands of lives could frighten consumers and businesses by enough to deepen the recession ... The flu's body count and age distribution of victims may prove critical.

23-APR-09 United States
Foreclosure sales will drive home prices lower well into 2010, preventing any sustained acceleration for home construction over that time frame.

22-APR-09 United States
The narrowest corporate bond yield spreads since early October 2008 follow from an ebbing of still excessive risk aversion, where forthcoming economic data should extend 2009's easing of high anxiety.

21-APR-09 United States
Huge credit losses testify to asset price deflation's destuctive force that might well be exceeded in terms of severity if wage deflation were to proliferate.

20-APR-09 United States
Bad news on debt repayment rocked equities, but expectations of significantly higher rates for charge-offs, foreclosures and defaults have been around for some time.

17-APR-09 United States
If consumer sentiment has indeed bottomed, a September 2009 end to the current recession is plausible ... VIX's ongoing decline is critical to returning credit market's to normal.

16-APR-09 United States
A moderation of the unfinished recession should not be confused with economic stabilization ... both businesses and households still struggle with sales and incomes that are well below trend.

15-APR-09 United States
Base metals prices indicate that the global economic slump has moderated materially and the Fed's March-April beige book effectively agreed.

14-APR-09 United States
March's retreat by retail sales did not obviate a sequential increase for Q1-09's real consumer spending, but it did warn of how dangerously low consumer spending is relative to trend.

13-APR-09 United States
Although March retail sales may lag expectations, the anecdotal evidence favors a further easing of the recession's severity.

03-APR-09 United States
Recent improvements in financial market performance will help to steady the labor market ... Higher share prices and narrower credit risk premia tend to lead stabilizations of the labor market.

02-APR-09 United States
Look for an outsized loss of jobs in March ... But fewer jobs may not imply a reversal of recent progress at stabilizing consumer spending, especially with so much monetary and fiscal stimuli forthcoming.

01-APR-09 United States
Recent evidence strengthens the case for an easing of the current recession ... March's auto sales boosted the odds of a sequential rise by Q1-09's real consumer spending.

31-MAR-09 United States
Until credit flows freely, core inflation will slow ... Q1-09's record number of credit rating reductions, a fast rising default rate, as well as relentless residential and commercial real estate price deflation will restrict credit and, thereby, trim inflation.

30-MAR-09 United States
To the degree the Treasury bond market overestimates price inflation, a stabilization of credit will be delayed ... Troubling prospects for US auto manufacturing and lower food commodity prices favor an extended containment of price inflation.

27-MAR-09 United States
A likely surge in mortgage refis will partly offset the loss of employment income owing to rising joblessness.

26-MAR-09 United States
With a possible assist from Fed purchases, the US Treasury conducted a successful auction of 7-year Treasury notes and, in response, both stocks and bonds rallied ... A firming of stock and bond prices is critical to economic stabilization.

25-MAR-09 United States
It's conceivable that once the US' unemployment rate peaks in 2010, the 12-month total return from high-yield bonds will be at least 10%.

24-MAR-09 United States
In view of how the broad averages of corporate bond yields remain well under their respective highs of Q4-08, the major equity price indices have room with which to advance.

23-MAR-09 United States
Washington's expanded efforts to stabilize the financial system and spur economic growth drove share prices sharply higher, in turn, wide credit risk premia are likely to narrow.

20-MAR-09 United States
Amid declining rates of resource utilization, inflation fears are wildly exaggerated.

19-MAR-09 United States
The fulfillment of current inflation fears requires significantly higher rates of resource utilization, where attaining the latter seems far fetched for now ... Not long ago, inflation expectations leaned too heavily on sharply higher energy and food prices, while discounting the importance of declining rates of resource utilization.

18-MAR-09 United States
The Fed's stepped-up efforts to end recession and expand credit reinforce the notion that investment- and speculative-grade corporate bond yields peaked for the cycle in Q4-08.

17-MAR-09 United States
Recent data imply economic armageddon will be avoided, but the next nine months will not be confused for nirvana.

16-MAR-09 United States
Ever sinking industrial output, declining capacity utilization, a record low housing market index, as well as new record lows for manufacturing capacity utilization and the Empire State manufacturing index, ultimately turned off investors ... Worry that the administration is not getting the message on the budget also discouraged market players

13-MAR-09 United States
Bad news on the world economy mounts ... yearly plunge of Japan's core machinery orders deepened from Dec-08's 26.8% to Jan-09's 39.5% ... China's industrial output rose by a very un-Chinese 3.8% yearly for Jan-Feb 09.

12-MAR-09 United States
Once retail sales enter into an unambiguous rising trend, recession will be near its end ... Retail sales may bottom before the jobless rate peaks ... Still, retail sales need help from a firming of share prices.

11-MAR-09 United States
Quantitative easing could go far at stabilizing the equity and corporate credit markets ... Better yet, the stimulus emanating from quantitative easing will not widen the budget deficit, and, if effective, would actually narrow the budget gap.

10-MAR-09 United States
If the worst has passed (or is close to passing) for financial institutions, an extended rally by financial assets may be underway ... US Treasury yield curve favors not only a Q3-09 conclusion to the current recession but a robust second half as well.

09-MAR-09 United States
Fed will do more to steer borrowing costs lower in order to steady a sinking economy ... CDX index and record pace for high-yield downgrades weigh heavily against renewed high-yield spread tightening.

06-MAR-09 United States
Provided that appropriate policies are employed, the worst for both the US economy and labor market should have passed by mid-year ... If so, corporate bond spreads will narrow considerably during 2009's second half.

05-MAR-09 United States
The same store sales performance of US retail chains has improved despite the worsened showing of payrolls ... Consumer spending could stabilize by mid-year.

04-MAR-09 United States
The latest index of homebuyer mortgage applications, ADP estimate of private-sector payrolls, ISM composite index, Beige Book, and CFO survey warned of a widespread deterioration of the US economy, whose remedy requires substantially lower private-sector borrowing costs.

03-MAR-09 United States
The renewed weakening of financial markets threatens to deepen and extend the recession ... Policymakers must give markets what they want immediately or else risk something far worse than the current slump.

02-MAR-09 United States
Ploicymakers must act quickly to prevent the latest plunge in share prices from reversing recent signs of a less severe contraction of economic activity.

27-FEB-09 United States
Mostly because of a moderation of consumer spending's contraction, Q1-09's decline by real GDP may lack the severity of Q4-08's 6.2% plunge.

26-FEB-09 United States
Upon closer inspection, the equity market soured on the proposed federal budget for fiscal 2009 ... Instead, investors prefer that the Fed drive mortgage yields down to extraordinarily attractive levels.

25-FEB-09 United States
Ploicymakers need to emphasize the over-arching necessity of lowering borrowing costs, especially mortgage yields, for the purpose of reversing the US' now ruinous pockets of price deflation.

24-FEB-09 United States
The market liked Ben Bernanke's testimony, especially his lending credibility to an end to recession by Q4-09.

23-FEB-09 United States
Perhaps Mr. Bernanke will convince investors that the Fed will do whatever it can to steady financial markets ... First and foremost, policymakers need to engineer at least a 50 basis points drop by the 30-year mortgage yield.

20-FEB-09 United States
Persistently weak equities threaten to undo progress at firming corporate bonds, where high yield bonds are most vunerable to slumping equities.

18-FEB-09 United States
Housing's stabilization requires substantially lower mortgage yields, in addition to a mortgage modification plan.

17-FEB-09 United States
Plunge by Treasury yields offset a bit of the sting of sharply lower share prices ... Wary investors demand focused and coherent strategies from policymakers.

13-FEB-09 United States
Relentless price deflation across a growing number of assets and products adds to debt repayment problems ... More expansionary monetary policies are in order globally.

12-FEB-09 United States
Retail sales ex autos and gas stations dipped by 1.3% yearly in January, which was much shallower than retail sales' overall annual plunge of 9.0% ... In past recessions, retail sales steadied despite shrinking payrolls and rising unemployment.

11-FEB-09 United States
A pronounced moderation of price deflation would be of considerable help at enhancing the supply of credit to the private sector.

10-FEB-09 United States
Stepped up efforts to curb asset price deflation would increase the availability of credit to the private sector.

09-FEB-09 United States
Latest climb by Treasury bond yields threatens to delay economic and financial stabilization ... Quantitative easing can compensate for insufficient fiscal stimulus.

06-FEB-09 United States
Higher equity prices may offset the loss of consumer confidence to a steeper unemployment rate ... Firmer equities and thinner corporate credit risk premia would facilitate economic stabilization.

05-FEB-09 United States
The same jump in jobless claims that adds to near-term economic fears also helps to contain labor costs ... Once sales growth resumes, enhanced operating leverage will amplify profitability.

04-FEB-09 United States
As inferred from the narrowing of corporate bond yield spreads, something other than just the fear of a huge federal government budget deficit may be driving Treasury bond yields higher.

03-FEB-09 United States
Lower mortgage yields are critical to a mid-2009 stabilization of home sales ... Auto sales may not improve until ABS issuance returns.

02-FEB-09 United States
If December's index of pending home sales fails to rise after three straight monthly setbacks, the need for lower fixed-rate borrowing costs becomes more apparent ... On balance, the net percentage of banks tightening lending standards dipped, but to still restrictive levels, in Q1-09.

30-JAN-09 United States
Real GDP's annualized quarterly contraction probably will bottom in Q1-09 ... by mid-year, consumer spending may be the first major component of GDP to steady.

29-JAN-09 United States
The latest climb by benchmark Treasury yields amid a severe recession imperils economic stabilization ... The corporate bond market's January recovery does not constitute sufficient evidence of a mid-2009 end to recession.

28-JAN-09 United States
In an atypically long policy statement, the FOMC strongly reasserted its intent to restore normalcy to private-sector credit markets ... If the Fed succeeds, corporate credit risk premia will be substantially thinner six to 12 months hence, as corporate bond yields probably drop considerably.

27-JAN-09 United States
Relentless home price deflation and record low income expectations support Fed purchases of Treasury bonds and mortgages ... Stabilization requires lower fixed-rate borrowing costs.

26-JAN-09 United States
December's surprising jump by existing home sales might soon be reversed unless mortgage yields quickly drop by at least 50 basis points ... The FOMC may reveal a willingness to drive mortgage yields lower at its January 28th meeting.

23-JAN-09 United States
The outlook for household expenditures remains very troubled ... mortgage yields must decline from current levels if housing's to steady by summer.

22-JAN-09 United States
Rising borrowing costs (especially mortgage yields) in a sinking economy will make matters worse ... in response to the sometimes unpleasant influence of market forces, private-sector interest rates soon should resume their downward slide.

21-JAN-09 United States
Despite the lowest 30-year mortgage yield on record, the NAHB's housing market index for January sank to a new nadir ... Sentiment will suffer if exceptionally low mortgage yields are incapable of steadying home sales by mid-year.

20-JAN-09 United States
January 20th's -5.5% plunge by the market value of US common stock was the deepest of any Presidential inauguration day ... The -2.1% drop of Reagan's first inauguration was the previous record low and the market value of common stock would slump by another -18% before bottoming in the summer of 1982.

16-JAN-09 United States
Ghastly news on industrial production boosts likelihood of extremely weak Q4-08 profits, with Q1-09 not doing much better ... Core consumer goods price deflation may linger until capacity utilization climbs higher.

14-JAN-09 United States
Except for yet another surge in weekly applications for mortgage refis, recent economic news has been dismal ... Record low ratio of retail sales to income highlights the severity of today's fear factor.

13-JAN-09 United States
US' ongoing contraction of exports will further depress profits ... Prime CP rates and LIBOR now reside at record or near record lows.

12-JAN-09 United States
The latest climb by stock-price volatility imperils a widespread narrowing of corporate bond yield spreads ... Given their still very wide girths, spreads might be able to accommodate wretched showings by earnings for both Q4-08 and Q1-09.

09-JAN-09 United States
Bad news from the jobs front reinforces the likelihood of a wretched showing by profits during 2008's final quarter ... More outsized job losses loom, though the depth of such declines may moderate.

08-JAN-09 United States
An especially weak report on December's labor market risks reversing some, but not all, of the recent progress at corporate bond yield spread narrowing ... Spreads ought to remain well above average until payrolls again grow materially, which may not happen until 2010.

07-JAN-09 United States
The US economy is about to be subject to its biggest dose of fiscal stimulus since WWII ... Weekly jobless claims in excess of 550K will warn of more outsized job losses near term.

06-JAN-09 United States
Policymakers realize that the US economy cannot afford another protracted slide by financial asset prices.

05-JAN-09 United States
Private nonresidential construction spending's unexpected monthly rise in November should be followed by a protracted slide ... By contrast, auto sales arguably now form a bottom.

31-DEC-08 United States
Sentiments expressed that "the market has nowhere to go but up," will be challenged by the fact that corporate earnings for the fourth quarter will reflect the most severe three month decline for GDP in decades.

24-DEC-08 United States
November's advances by both real consumer spending and real disposable personal income and the ongoing surge of mortgage applications reveal the considerable economic benefits to be derived from cheap energy and the lowest mortgage yields in more than 40 years.

23-DEC-08 United States
November's home sales data lagged expectations, but the foundations for a stabilization of home sales emerge ... In California and Southern Florida, home sales surged annually, but home prices plunged deeply.

22-DEC-08 United States
Lower corporate bond yields are critical to economic stabilization ... Consumer spending eventually will benefit from the enhancement of household purchasing power via product price deflation.

19-DEC-08 United States
The declining trend of corporate bond yields since the FOMC's historical rate cut and policy statement of December 16th imoproves prospects for the economy, financial markets and equities ... To date in December, long-term investment-grade corporate bonds have outperformed long-term Treasuries.

19-DEC-08 United States
Declining trend of corporate bond yields improves prospects for economy, financial markets and equities ... December-to-date returns from investment-grade corporate bonds top those of Treasuries.

18-DEC-08 United States
Earlier in 2008, the US' slump was exacerbated by the fundamenatally unwarranted ascents of both mortgage yields and energy prices ... 2009's economy should benefit from the ongoing correction of those earlier mistakes.

17-DEC-08 United States
One the primary intents of the Fed's mega-stimulus package is to increase the relative attractiveness of assets other than Treasuries ... Recent jump by applications for mortgage refis is encouraging.

16-DEC-08 United States
At long last, the Fed supplied the US economy with a badly needed stimulatory shock ... The speculative-grade bond yield may now descend from what should prove to be a multi-decade high.

15-DEC-08 United States
Production now eases globally with a severity perhaps not seen since the early 1980s ... Lack of any hint of a bottom offers some justification for today's extraordinarily wide corporate credit risk premia.

12-DEC-08 United States
The US government probably will not stand idly by and allow some of the big three automakers to collapse ... November's core retail sales grew for the first time in three months ... Consumers' view of current conditions rose monthly by a record percentage in early December.

11-DEC-08 United States
Prospects worsen for US consumer spending ... Not only are jobs being lost at a prodigious rate, but Q4-08's real household net worth now incurs its deepest yearly plunge on record ... Government borrowing offsets household de-leveraging.

10-DEC-08 United States
Jobless claims probably jumped for the week of December 6th after distortions related to the seasonal adjustment of data from a holiday-shortened week skewed November 29th's claims lower ... Once a monthly peak for jobless claims lasts for at least two months, the recession is all but over.

09-DEC-08 United States
Each recession since the 1960s ended with either a stabilization of or an improving trend for profits ... Neither impends for now ... Thus, predicting an end to the current recession remains a speculative endeavor.

08-DEC-08 United States
Spreads have widened despite 21.5% jump by market value of common stock since November 20, 2008.

05-DEC-08 United States
Equities transcended an extraordinarily weak payrolls report ... Could risk aversion be ebbing by enough to narrow excessively wide corporate bond yield spreads?

04-DEC-08 United States
A comparatively late start to the holiday shopping season skewed November same store sales lower ... Q4-08's post-1932 highs for corporate bond yield sreads were joined by the lowest CEO outlook index on record.

03-DEC-08 United States
Recent news from the labor front has been dreadful, but significantly lower mortgage yields and unexpectedly cheaper energy might help to curb the severity of the ongoing contraction of economic activity.

02-DEC-08 United States
November's fewest auto sales since October 1982 were partly offset by October's steepest home affordability index since mid-1973 ... Lower Treasury yields should further ehance home affordability.

01-DEC-08 United States
Sharply lower Treasury bond yields and cheaper energy might yet prove to be the first steps toward a stabilization of economic activity.

26-NOV-08 United States
The latest batch of dismal economic news did not stop share prices from rising ... Apparently, investors sense that the US government and Fed will soon apply effective policy remedies.

25-NOV-08 United States
In quick response to the Fed's intention to buy as much as $600 billion of mortgage-related debt, 30-year mortgage yields reportedly plunged from 6.25% to 5.5% today ... Lower mortgage yields can compensate for elevated price deflation risks.

24-NOV-08 United States
Hints of slightly diminished risk aversion have surfaced ... Still, investor sentiment remains vulnerable to more bad news on the economy ... Rumor has it that November's seasonally adjusted auto sales may edge up from Oct-08.

21-NOV-08 United States
The holiday-shortened week of November 28 should bring more bad news on home sales and home prices ... Extraordinarily wide corporate bond yield spreads may not narrow significantly until a bottom for economic activity comes into view.

20-NOV-08 United States
Stocks plunged again as corporate credit risk premia widened further ... Rumors of a disturbing rise by prime mortgage foreclosures only weakened sentiment.

19-NOV-08 United States
Equities may not stabilize until ultra-wide corporate bond yield spreads narrow significantly from current bands ... Conceivably, more investors might sell equities in order to fund the purchase of corporate bonds.

18-NOV-08 United States
The contraction of bank-held nonfederal debt will eventually arrive ... Although the economy managed to grow amid previous such contractions, this time fiscal stimulus may be needed ... Government borrowing can substitute for private-sector borrowing.

17-NOV-08 United States
The way to equity market stability is through a still exceptionally treacherous corporate bond market ... A major thinning of corporate yield spreads may include the funding of corporate bond purchases with the sale of common equity shares, which would put downward pressure on stock prices early on.

14-NOV-08 United States
Anger at the idea of bailing out the major US automakers ignores the fact that they were assailed by two extreme market dislocations in the form of a superspike in oil prices followed by the worst financial crisis since The Great Depression.

12-NOV-08 United States
Three month LIBOR stands alone among financial market indicators that have improved ... Look for the US government to attempt to directly stimulate home sales fairly soon.

11-NOV-08 United States
Lower fuel prices might yet supply unexpected support to consumer spending and contradict the nearly universal pessimism that manifests itself in the extraordinarily wide spreads of corporate and state & local government bonds.

10-NOV-08 United States
The response by corporate bond yield spreads to the recent plunge by LIBOR has been uninspiring ... Major narrowings of bond spreads are critical to the stabilization of financial markets and the economy.

07-NOV-08 United States
Deep job losses will both discourage a narrowing of credit risk premia and prevent any increase in the availability of reasonably priced credit ... Thus, owing to the credit crunch's prominent role in the current recession, the slump will be extended.

07-NOV-08 United States
A meaningful easing of the current deterioration of the labor market may not become apparent until mid-2009 ... Getting there may require a significant narrowing of still excessively wide credit risk premia.

05-NOV-08 United States
Thus far, the response of corporate credit risk ptremia to sharply lower LIBOR has been most disappointing ... October has been replete with various record low readings on business activity, which adds to the difficulty of lessening risk aversion.

04-NOV-08 United States
Stocks rallied as LIBOR sank ... If VIX continues to subside, US corporate bond yield spreads just might narrow significantly, but to still wide bands ... Firmer commodity prices imply that the global slump may not yet be especially severe.

03-NOV-08 United States
October's plunge in equity prices, widening of credit risk premia, and firming of loan standards slashed real economic activity ... In October, auto sales sank by 15% monthly to the fewest sales since Feb-83, the ISM factory index plummeted to a 1982 low, while Q4-08's index of the tightness of bank C&I loans set a record high.

31-OCT-08 United States
The economy's downside risks seem to well exceed the downside price risks of non-federal credit market instruments.

30-OCT-08 United States
Absent a thinning of the trade gap, Q3-08's annualized quarterly contraction of real GDP deepened from 0.3% to 1.3% ... Real GDP should continue to shrink through Q1-09 and the next recovery should commence by Q3-09.

29-OCT-08 United States
The now extraordinarily steep Treasury yield curve suggests that recession could end by mid-2009 ... Core capital goods orders compare favorably with 2001's slump, while base metals prices have surge for the week-to-date.

28-OCT-08 United States
Despite surging by 9.9% on October 28th, the market value of US common stock still lags its level on the eve of Lehman's collapse by 26.8% ... Dysfunctional financial markets still threaten to deepen the recession.

27-OCT-08 United States
Bank holdings of private-sector credit still grow except for residential real estate loans excluding home equity loans ... Plunging commodity prices are opening the way for substantially lower benchmark interest rates.

24-OCT-08 United States
Even fundamentally unwarranted asset price declines can inflict considerable damage on the real economy ... October 30's release of Q3-08 real GDP threatens to reinforce bearish views.

22-OCT-08 United States
Lower fuel prices can limit consumer spending's downside risk ... but, price deflation may soon supplant price inflation as a worry for policymakers ... Ben Bernanke might soon warm up the helicopter engine.

21-OCT-08 United States
The rest of the credit market now gets a taste of the excessive price discounting that has plagued certain segments of the MBS market ... Still, a worsening economic outlook makes it difficult to shed what might well be excessive risk aversion.

20-OCT-08 United States
Credit risk premia have yet to attain an improving trend ... LIBOR has yet to drop by enough to signal a material easing of the credit crunch ... Ongoing credit turmoil warns against complacency in the event September's existing home sales surprise on the upside.

17-OCT-08 United States
The impossibility of escaping the bear market in equities without a substantial narrowing of ultra-wide credit risk premia will become increasingly apparent ... Record stock price volatility owes much to the now arguably record-wide risk premia of corporate and municipal bonds.

16-OCT-08 United States
Higher mortgage yields in a sinking economy worsen the outlook ... However, the waning of price inflation makes room for lower Treasury bond yields, which would reduce mortgage borrowing costs.

15-OCT-08 United States
According to Mr. Bernanke, the latest swelling of inflation fears was unwarranted ... Similarly, investors are probaly exaggerating the upward pressure that a wider federal budget gap will put on real interest rates, especially in the context of reduced private-sector net bnorrowing.

14-OCT-08 United States
Price disinflation, the reduced net borrowing of the private-sector, and above-average risk aversion should more than offset the upward pressure now being put on Treasury bond yields by expectations of a significantly larger US federal budget deficit.

13-OCT-08 United States
Monday's 11.4% surge by the market value of US common stock still left this measure down by -20.4% since the collapse of Lehman Brothers ... Even the most downbeat projections of early October's Blue Chip survey judge the corporate bond market to be guilty of "irrational gloom".

10-OCT-08 United States
Rather than risk the worst economic slump since the Depression, governments will soon take coordinated action to restore interbank lending ... VIX at 70 shows that financial chaos has reached a level that can only stifle economic activity.

09-OCT-08 United States
The forced liquidation of financial assets by highly leveraged hedge funds may explain the market's downward spiral ... the still decent condition of nonfinancial corporations should erode as the economy and profits slump.

08-OCT-08 United States
Is the current situation the antipode of "irrational exuberance" or when the economy was good, but not that good? ... Nonetheless, ultra-wide spreads and plunging share prices will curb expenditures in general.

07-OCT-08 United States
Rightly or wrongly, stocks and corporate bonds now seem to be pricing in the worst recession since the Great Depression.

06-OCT-08 United States
A steadying of equity prices requires a narrowing of extraordinarily wide credit risk premia ... Record wide spreads for both high yield bonds and bank & finance bonds and the widest Baa spread since 1933 are not to be taken lightly.

03-OCT-08 United States
Passage of the mortgage rescue package is helpful, but economic performance is worsening as shown by September's deepest monthly loss of jobs of the current recession ... Very wide credit risk premia will persist until a bottoming of business activity is within view.

02-OCT-08 United States
A stabilization of the US economy may require interest rates that are no higher than 1% for fed funds and 3.3% for the 10-year Treasury yield by year's end ... Fast fading inflation risks now clear the way for significantly lower interest rates.

01-OCT-08 United States
Persistently wide credit risk premia reflect an extraordinary aversion to risk which now diminshes economic activity ... the Baa industrial company bond yield spread is now at a band last commonly observed in 1933.

30-SEP-08 United States
September 30's 4.7% recovery by the US' market value of common stock does not signal a turning point ... Extraordinarily wide corporate credit risk premia amid a slowing economy warn that the downside risks still predominate.

29-SEP-08 United States
Congress' rejection of the mortgage rescue package puts pressure on the Fed to assure an adequate supply of credit to the overall economy ... The fed funds target should soon be no higher than 1.5%.

26-SEP-08 United States
The wait for a bailout package continues ... Stock prices advanced but credit risk premia remain extraordinarily wide, where credit might again give direction to equities.

25-SEP-08 United States
A sinking US economy with its adverse implications for corporate financial health very much challenges the durability of September 25th's climb by share prices and narrowing of corporate credit risk premia.

24-SEP-08 United States
More needs to be done to stabilize financial markets ... Thus far, leadership has done little to restore confidence ... A bunch of investment-grade bonds recently were offered, but at spreads typically associated with low Ba and high single-B credits.

23-SEP-08 United States
The wait may be excruciating, but Congress has little choice but to approve a meaningful mortgage rescue package ... A rock solid bottom for housing requires a healthier US economy, whose attainment may be facilitated by a simultaneous cutting of interest rates by the Fed, the ECB and the Bank of England.

22-SEP-08 United States
Another oil price shock on top of credit market stress makes matters worse ... World's major central banks might soon step up efforts to remedy a worldwide jump in risk aversion.

19-SEP-08 United States
The massive bailout of America's financial institutions was the lesser of two evils. The alternative was to allow the lending base to shrink amidst a wave of bank failures and then have to bail out a depleted FDIC.

18-SEP-08 United States
Any further significant erosion to the commercial paper market would remove or raise the cheapest borrowing options available to many corporations and add to the considerable downside forces afflicting potential economic growth.

17-SEP-08 United States
A bottom for the housing market may be in sight with the recent drop in mortgage rates, surge in residential purchases and refinancing and continued slowdown in new construction and home sales. These are the three leading trends required to generate a bottom for home price deflation.

16-SEP-08 United States
The unwinding of Lehman Brothers' $613 billion in liabilities and its related credit default swaps will provide a severe stress test to credit markets. The amount of time needed and turmoil created by this situation will provide great insight into the endgame for the credit crisis.

12-SEP-08 United States
Provided that inflation risks recede, a fed rate cut will not prompt a sell-off of the dollar exchange rate and an accompanying climb by Treasury bond yields ... Lately, investment-grade credit risk premia have been widening by more than high-yield risk premia.

11-SEP-08 United States
Forthcoming evidence of slower price growth amid declining rates of resource utilization will open the way for a broad decline by interest rates ... If the economy is weak, the 10-year Treasury yield should break under 3.5%.

10-SEP-08 United States
Lower commodity prices and rising unemployment now lay the foundation for significantly lower benchmark interest rates, which will drop mortgage yields to levels that are low enough to compensate homebuyers for elevated home price deflation risks ... CPI deflation prevailed when home prices sank in Japan during the 1990s and in the US during the 1930s.

08-SEP-08 United States
US government ownership of FNMA and FHLMC should help to substantially thin the yield spreads between conforming mortgages and Treasuries ... Anything which facilitates a stabilzation of home sales will help to form a bottom for the credit cycle.

05-SEP-08 United States
August's jobs report highlighted the underlying weakness of the US economy and favored yet lower benchmark interest rates.

04-SEP-08 United States
Thursday's sell-off implies financial markets priced in the loss of more than -100,000 payroll jobs in August ... August's limp same store sales support expectations of a contraction of real consumer spending from Q2-08 to Q3-08 ... Declining energy prices now lay the foundation for a Fed rate cut by year's end.

03-SEP-08 United States
A recent "September 2001 like" surge in jobless claims prompts investors to brace themselves for what could be the worst employment report of the current economic slump ... August's loss of jobs should be significantly deeper than July's loss of -51,000.

29-AUG-08 United States
Sluggish employment income complements downbeat prospects for consumer spending ... July's drop by real consumer spending portends a marked slowing of Q3-08's real GDP ... Real GDP's 3.3% annualized quarterly advance of Q2-08 sank to just 0.2% when restricted to real domestic spending.

28-AUG-08 United States
Sentiment cautiously improves ... a post Labor Day plunge by oil prices would help ... but, a weaker-than-expected reading on August's payrolls (due September 5) would widen credit risk premia.

27-AUG-08 United States
July's durable goods orders revealed a surprisingly resilient econonmy despite the worst credit crunch since the Great Depression.

26-AUG-08 United States
July's results on new and existing home sales topped expectations, while home price deflation moderated in June ... However, more evidence is needed before a bottom for housing can be declared with confidence.

25-AUG-08 United States
Both investment-grade and high-yield CDX spreads remained under their recent highs despite the equity sell-off of Monday, August 25th ... More growth by existing home sales would ease home price deflation fears ... Lower Treasury bond yields reflect rising likelihood of Fed rate cut if the economy deteriorates over the next several months.

22-AUG-08 United States
Chairman Bernanke's inflation outlook in his Jackson Hole speech would imply that recent pick up in commodity prices and the dollar's decline are mere blips from heightened financial market anxiety, and that the greater threat is slowing economic activity.

21-AUG-08 United States
The complete devastation of the private RMBS market have left agency issues the only major outlet for structured mortgage products. This makes it imperative that the government take decisivise action to nationalize the GSEs in order to spark relief from elevated mortgage rates.

15-AUG-08 United States
Equities are more sanguine about the business outlook than is the corporate credit market ... A plunge in oil prices to under $100 per barrel by the end of September would justify the recent drop in stock price volatility ... Treasury yields now anticipate lower commodity prices.

14-AUG-08 United States
Declining prices for oil and other industrial commodities, as well as the disinflationary effect of rising unemployment, diminished the significance of July's fastest annual rate of CPI inflation since January 1991 ... Recent state jobless benefits data had troubling implications for economy and earnings.

13-AUG-08 United States
August 13th's gains by oil prices and Treasury bond yields reinforced the accompanying slide by equity prices and concurrent widening of CDX credit risk premia.

12-AUG-08 United States
If, despite a continued slide by energy prices, the US economy deteriorates significantly from Q3-08 to Q4-08, the FOMC probably will cut rates at its December 16 meeting, while the 10-year Treasury yield drops to a range of 4.5% to 4.75% ... A global slowing of world expenditures implies that both the ECB and Bank of England also are likely to cut rates by year's end.

11-AUG-08 United States
Q3-08's broad tightening of bank loan standards underscores the US economy's considerable downside risks ... Diminished access to bank credit will be disnflationary ... Recent 5-year TIPS contract reveals a material drop in inflation expectations.

08-AUG-08 United States
Some claim eight is a lucky number and maybe that explains 8/8/08's big gains by equities and the dollar ... For the near-term, downside risks faced by earnings and the economy well outweigh any upside potential ... Wide credit risk premia imply growth will be curbed by above-average risk aversion.

07-AUG-08 United States
Prospects for consumer spending worsened as jobless claims climbed up to a recessionary range ... Although credit risks rose, at least interest rate risks were trimmed by the latest indication of a disinflationary labor market ... A Fed rate hike may have to wait until mid-2009 at the earliest.

06-AUG-08 United States
Thus far, credit risk premia have shown a muted response to the latest firming of equity prices ... The market value of US common stock is still well under where it was when CDX spreads last bottomed in mid-May ... The latest drop in oil prices has not been deep enough to materially diminish macro risks.

05-AUG-08 United States
An extended slide by oil prices will do far more than slash inflation risks ... much reduced energy costs also will reduce risk aversion and boost real spending by enough so that the US avoids a double-dip slump.

04-AUG-08 United States
Slumping commodity prices brought attention to slower global expenditures that will endanger the US economy's one bright spot -- exports ... Corporate credit risk premia will remain wide until rates of resource utilization show signs of climbing higher.

01-AUG-08 United States
July's seasonally-adjusted unit sales pace for cars and light trucks in the US plunged to its lowest reading since April 1992 despite the stimulus of rebate checks ... Absent sharply lower oil prices, a further deterioration of the economy seems unavoidable.

31-JUL-08 United States
Widespread expectations of a marked second-half deceleration of economic activity imply that a bottom for the current credit downswing is not yet in sight ... The credit cycle may not turn higher until mid-2009.

30-JUL-08 United States
Reflecting the lack of any conclusive evidence of an important turning point for corporate earnings, credit spreads have responded cautiously to recent equity price advances and declines in stock price volatility.

29-JUL-08 United States
As oil prices sink, bottoms draw closer for both the financial markets and the US economy.

28-JUL-08 United States
A stabilization of home sales and an easing of credit stress require a 10-year Treasury yield of less than 4% ... The longer is the stay of wide credit risk premia, the greater is the danger of a retrenchment of business spending.

25-JUL-08 United States
Wisely, markets are skeptical of recent better than expected news on durable goods orders, new home sales, and consumer sentiment ... An oil price shock on top of a credit crunch warns against extrapolating too much from a limited number of upside surprises.

24-JUL-08 United States
The noxious mix of an oil price shock and credit crunch now slows the world economy ... Recent news from Asia hints of an impending deceleration of US exports that all but assures a quarterly contraction of US real GDP ... Oil is one of the worst "safe havens" imaginable from the perspective of macroeconomic performance.

23-JUL-08 United States
The recent "jawboning" of high ranking Fed officials may help to curb inflation expectations ... Effective "jawboning" would preclude the need for a Fed rate hike amid declining rates of resource utilization.

22-JUL-08 United States
The US economy requires more in the way of oil price deflation ... Unless the price of crude is no greater than $100 per barrel soon after Labor Day, a harsh slowdown may materialize by Q4-08.

21-JUL-08 United States
A counter-cyclical surge by energy prices amid a deflationary credit crunch favors a -0.7% annualized quarterly contraction for Q4-08's real GDP ... Absent sharply lower oil prices, recession may be difficult to avoid.

18-JUL-08 United States
Expectations of a rising default rate limit the scope of any thinning of high-yield bond spreads ... nonetheless, an extended slide by oil prices might be enough to narrow the recent 767 basis points yield spread of high-yield bonds to a range of 600 to 650 points.

17-JUL-08 United States
An oil price shock on top of a credit crunch seems like a toxic mix for the US economy ... Thus the latest drop by oil prices improves the economic outlook and helps to narrow credit risk premia.

15-JUL-08 United States
Sharply lower energy prices are necessary for any near-term stabilization of the economic outlook. Rate cuts are of secondary importance. Hence, markets again failed to respond positively Bernanke's Congressional testimony.

14-JUL-08 United States
The likelihood of a Federal Reserve rate hike diminishes day by day as negative momentum for housing has yet to abate and ever more financial institutions fall into crisis mode.

10-JUL-08 United States
In what remains a mild recession for employment should prevent US consumer spending from falling into the abyss ... still the woeful outlook for housing warns against complacency.

09-JUL-08 United States
Neither the investment-grade nor high-yield CDX credit default swap spread index swelled in reaction to July 9's deep drop in share prices, suggesting that Wednesday's equity market sell-off was overdone.

08-JUL-08 United States
Base metals prices imply that crude oil's price could drop considerably to the obvious benefit of most financial assets.

07-JUL-08 United States
A deep drop by oil prices might allay growing worry over the economic outlook ... Otherwise, look for continued weakness in housing to pressure financial institutions.

03-JUL-08 United States
June's weak employment report gave no indication of an impending bottom for US economic activity, which all but rules out a Fed rate hike and warns of further deterioration for the macro drivers of corporate credit worth.

02-JUL-08 United States
Bearish sentiment dominates as ominous developments now receive a much greater weight than positive news ... Bearishness may be overdone, but neither profits nor the high yield bond default rate has yet to signal a turn for the better.

01-JUL-08 United States
The ISM's surprisingly resilient factory index does not refute a general dimunition of corporate credit worth ... June's extraordinarily weak motor vehicle sales show just how damaging record high energy prices can be to the overall economy.

30-JUN-08 United States
A slowing of unit labor costs offsets the narrowing of profit margins by commodity price inflation ... still, in response to the damage that skyrocketing energy costs can do a weak economy that has a low tolerance for heightened uncertainty and higher Treasury bond yields, high-yield bond spreads ballooned in June .

27-JUN-08 United States
Rebates have supplied valuable support to consumer spending and might yet prompt an upside surprise for growth in general, especially if oil prices recede ... Oil prices are now very steep relative to base metals prices, suggesting considerable downside risk for oil prices.

26-JUN-08 United States
Despite passable economic news, stock prices plunged in response to fears of an oil-price-surge-driven drop in business activity.

25-JUN-08 United States
Many are of the opinion that downside economic risks have not declined since April 30's FOMC meeting. After all, from April 29 until recently, the market value of US common stock fell by -3.5%, while many broad indices of corporate credit risk widened significantly.

24-JUN-08 United States
In June, the expectations of US consumers revealed fears of the worst performance by personal income on record and the highest rate of CPI inflation since the early 1980s ... We think June's record low reading on consumer expectations speaks volumes about the US economy's current predicament.

20-JUN-08 United States
A sinking equity market worsens prospects for both credit and the overall economy ... A soft US economy preserves the possibility of another drop by short- and long-term Treasury yields, including more in the way of Fed stimulus.

19-JUN-08 United States
Rising mortgage yields should delay a stabilization of home sales and put more downward pressure on residential real estate prices.

18-JUN-08 United States
A disinflationary monetary policy amid severe home price deflation warns of more mortgage-related write-offs and thinner net interest margins, both of which could impair the lending capabilities of US banks.

17-JUN-08 United States
The Fed's unlikely to hike rates amid rising unemployment and a declining rate of industrial capacity utilization ... A major narrowing of corporate bond yield spreads must wait patiently for a peaking of the high-yield downgrade ratio.

16-JUN-08 United States
The NAHB's housing market index for June fell to a record low ... If it's premature to declare a bottom for housing, then the US economy remains at risk and another slide by Treasury yields cannot be dismissed.

16-JUN-08 United States
Rate hike is far from imminent according to containment of core CPI inflation and consumer sentiment's 28-year low.

13-JUN-08 United States
Rate hike is far from imminent according to containment of core CPI inflation and consumer sentimaent's 28-year low.

11-JUN-08 United States
Previous easings of fed funds did not end until improvements in credit market conditions were much more convincing than the current situation ... Investors now fret that the Fed again overestimates the economy's underlying strength.

10-JUN-08 United States
It's too early to fret about the nearness of a Fed rate hike, unless a worsened inflation outlook and a plunging dollar exchange rate put unwanted upward pressure on Treasury bond yields

09-JUN-08 United States
Financial markets have yet to strengthen by enough to allow for a Fed rate hike, which may be an unduly bold action given how a fundamentally soft economy should block the sustained proliferation of breakneck food and energy price inflation.

06-JUN-08 United States
To the degree a lower dollar fuels oil price inflation, central bankers need to be careful about not putting unwanted downward pressure on the dollar through either words or actions.

05-JUN-08 United States
Stocks rallied and credit spreads narrowed in response to growing confidence in the likelihood of a Q2-08 bottom for US economic activity. Will the May employment report confirm the improved view of second-half prospects?

04-JUN-08 United States
The US consumers' lowest income expectations on record favor a containment of unit labor costs that should both benefit profitability and limit any rise by unemployment ... Inflation would be a much bigger danger if expectations of both inflation and income growth were rising sharply together.

03-JUN-08 United States
Worry over the adequacy of economic growth slashed share prices and lowered Treasury yields ... Fast-sinking financial markets and a struggling economy would supercede the dollar exchange rate as far as giving direction to Fed policy ... May's worst showing by auto sales since Jul-98 warns not to write-off recession risks.

02-JUN-08 United States
Oil's record-high price will not persist indefinitely amid declining prices for other industrial commodities ... Stocks moved lower not only because of burdensome energy prices, but also in recognition of the credit market's still elevated level of stress.

30-MAY-08 United States
A deceleration of employment income will prevent a lasting climb by core inflation ... Prime financial- and nonfinancial-company CP rates are now at unusually deep discounts relative to LIBOR.

29-MAY-08 United States
Just as it did exactly one year ago, the Treasury bond market now overestimates the underlying vitality of the US economy. Higher mortgage yields will worsen housing's plight and intensify home price deflation.

28-MAY-08 United States
Recent 66 basis points premium of 2-year Treasury over fed funds -- the widest in 38 months -- hints of a moderation of current economic slump, but does not preclude more rate cuts.

27-MAY-08 United States
Although broad equity indices managed to transcend the worst reading on US consumer expectations since December 1973, only the brave dare to declare impending bottoms for both housing and the US economy.

23-MAY-08 United States
An ongoing decline by base metals prices may be a preview of what awaits energy prices.

22-MAY-08 United States
The US labor market isn't tight enough to "fund" a lasting upturn by core inflation and the US economy isn't strong enough to shoulder higher benchmark Treasury yields.

21-MAY-08 United States
A bottoming of fed funds at the current 2% probably requires a Q2-08 bottoming of US economic activity.

20-MAY-08 United States
If equities enter into another extended slide, a widening of corporate credit risk premia probably will resume.

19-MAY-08 United States
Recent leading indicators suggest the US' current slump may be less severe than any previous recession since WWII. Nonethelees, little more than a rising default rate will limit any narrowing of corporate credit risk premia.

16-MAY-08 United States
To state that fed funds will bottom at its current 2% is equivalent to declaring a impending trough for economic activity.

14-MAY-08 United States
Core inflation running at well under 3% annualy is a historically tolerable level that should place the current severe home price deflation as the top priority for policymakers.

14-MAY-08 United States
Whether or not we technically avoid a recession, the poor outlook for the US consumer assures subpar growth stretching well into 2009.

13-MAY-08 United States
If Fed policymakers focus more intently on headline inflation, then perhaps the US economy now forms a rock-solid bottom.

12-MAY-08 United States
US profitability has thus far avoided its deeper slide of 2001 ... LIBOR's deep year-to-year drop should curb intetest expense and help prevent a pronounced re-widening of spreads.

09-MAY-08 United States
Ever climbing energy prices and persistent home price deflation will preserve a heightened sense of anxiety among consumers, businesses, creditors and borrowers.

08-MAY-08 United States
More good news on jobless claims would help to limit consumer spending's downside risks.

07-MAY-08 United States
With no bottom in sight for home sales and no top in sight for energy prices, investors sold equities and demanded greater compensation for credit risk.

06-MAY-08 United States
Rising mortgage yields and declining consumer confidence only delay a stabilization of home sales, where fewer home sales intensify the downward presssure being put on home prices.

06-MAY-08 United States
Outside of housing, banking, retailing and motor vehicles, the latest slump lacks the severity of previous recessions ... Nonetheless, Q2-08's tightening of bank lending standards warns of subpar growth.

02-MAY-08 United States
A shallower than expected decline by April's payrolls and a lower unemployment rate were offset by fewer hours of work and indications of slower income growth ... Despite indications of an oversold credit market, the fundamentals have yet to reveal a broad-based improvement in corporate credit worth.

01-MAY-08 United States
Fewer jobs, slower income growth, record low expectations for income growth, burdensome energy costs, stringent lending standards, the fewest home sales since the autumn of 1997, and unexpectedly deep home price deflation warn of decidedly subpar consumer spending.

30-APR-08 United States
Technically speaking, the US avoids recession by a hair's breadth, while the Fed sounds far from convinced that stabilization impends.

29-APR-08 United States
Recent deep declines by consumer confidence warn of more in the way of subpar household expenditures ... April's index of consumer income expectations sank to a record low implying that core inflation will be well contained.

28-APR-08 United States
CDX spreads extended their narrowing at the start of a big week for Fed policy and economic data ... but burdensome energy costs might yet worsen prospects by enough to re-widen credit risk premia ... complacency is ill advised, after all the high-yield spread formed four distinct peaks during 1998-2002.

23-APR-08 United States
The US' worsened distribution of high-yield credit rating revisions still compares favorably to what held immediately before and during the recessions of 2001 and 1990-1991 ... Perhaps the high-yield bond default rate will fall considerably short of its two previous peaks of 2002 and 1991.

22-APR-08 United States
Just when a hint of an impending stabilization of home sales arrives, surging oil prices worsen the economic outlook ... Any curbing of oil price inflation might best be handled by policymakers outside the Fed.

21-APR-08 United States
The Fed may be nearly finished with paring rates if only because of the now much lower real fed funds rate compared with the two previous recessions. Nonetheless, the downside risks to US growth remain great enough to favor at least a 50 basis points cutting of fed funds at the April 30th meeting of the FOMC.

18-APR-08 United States
The latest firming of financial markets ought to boost the confidence of both businesses and consumers, while also increasing the supply of financial capital.

17-APR-08 United States
What transpired in 2001-2003 warns that a possible narrowing of the Fed's likely interest rate reduction of April 30 from March 18's 50 basis points to 25 points offers no assurance of an approaching end to the latest series of Fed rate cuts.

16-APR-08 United States
Despite the good news of the equity market's latest advance, crude oil's accompanying price surge threatens to further reduce household purchasing power and squeeze profit margins. Downside risks still dominate the US' upside potential.

15-APR-08 United States
Surge by crude oil prices only adds to US economy's downside risks ... Still, Fed's probably more worried about home price deflation than about a jump in energy inflation that has yet to boost the underlying rate of core inflation.

14-APR-08 United States
US consumer spending struggles as Q1-08's core retail sales posted smallest annual increase since the recession-bound final quarter of 2001.

11-APR-08 United States
Global exposure prevented the disappointing Q1-08 results of one major US conglomerate from being much worse ... Plunge by 7-day prime non-ABS CP rate favors significantly lower LIBOR by summer.

10-APR-08 United States
Although same store sales are faring much worse than they did during 2001's recession, the labor market seems to be holding up better, while, in a radical departure from the last recession, US exports now boom. US companies with global reach may surprise on the upside.

09-APR-08 United States
Nonfinancial companies have entered the current business cycle slump in comparatively decent financial condition, on balance. Practically all aggregate measures of nonfinancial-corporate health are superior to their respective readings of the two previous recessions.

08-APR-08 United States
At long last, the Fed all but admitted to the presence of a recession, which favors a fed funds rate no higher than 1.5% by summer.

07-APR-08 United States
First quarter earnings will mark the seventh consecutive quarter of declining profit growth when the median change in quarterly net income is measured at a moving yearlong rate. This profit drain saps debt repayment capacity, which justifies much of the rise in credit risk premia, and guarantees a higher default rate.

07-APR-08 United States
First quarter earnings will mark the seventh consecutive quarter of declining profit growth when the median change in quarterly net income is measured at a moving yearlong rate. This profit drain saps debt repayment capacity, which justifies much of rise in credit risk premia, and guarantees a higher default rate.

04-APR-08 United States
The current labor market slump still lacks the severity of 2001's recession. Nonetheless, consumer spending probably got hammered in March as nearly anything that could go wrong did. Little more than previous and forthcoming monetary and fiscal stimuli should moderate the performances of employment and cobnsumer spending in the months ahead.

04-APR-08 United States
Previous and forthcoming Fed rate cuts, extraordinary efforts to enhance financial system liquidity, and impending fiscal stimulus should curb joblessness and firm consumer spending in the months ahead. Basically, monetary and fiscal stimulus will make itself known by Q3-08.

03-APR-08 United States
Jobless claims and the ISM's service index warn of a subpar economy that should sustain bond yield spreads at well-above-trend widths ... Still, compared to Q1-08, the high-yield upgrade ratio fared worse prior to, during, and immediately after 2001's recession.

02-APR-08 United States
Ben Bernanke was quite guarded about near-term prospects for the US economy. Barring a slew of better than expected readings on the US economy, a marked thinning of corporate credit risk premia, and at least a mild rally by equities, the fed funds rate should be no greater than 1.75% at the end of the next April 30th meeting of the FOMC.

01-APR-08 United States
The equity market is beginning to sense nothing worse than a mild recession, which should ease credit market stress.

31-MAR-08 United States
The still brisk pace of commodity price inflation owes more to the robust growth of emerging market ecopnomies than to a re-flationary Fed policy ... Not since the US' mild recession of 1970 has world economic growth been so lively amid a slumping US economy.

28-MAR-08 United States
Economic news has fallen considerably short of what otherwise might ease risk aversion. For now, risk aversion may be curbing expenditures by enough to prompt a further tightening of lending standards. The US economy needs a positive shock.

27-MAR-08 United States
Q4-07's GDP accounts showed that profits margins and interest coverage are much stronger than at the start of the 2001 recession. Thus, not only will nonfinancial companies be better able to withstand adverse developments than otherwise, but now wide bond yield spreads could thin considerably once macroeconomic risks subside.

26-MAR-08 United States
New home sales eclipsed expectations and, absent a plunge by machinery orders, February's durable goods orders grew ... High yield bond spreads seem very wide vis-a-vis the group's median EDF and considerably less so relative to highest monthly VIX since Mar-03.

25-MAR-08 United States
Along with a shrinkage of job opportunities and higher prices for food and energy, record home price deflation diminishes consumer confidence ... A material thinning of corporate credit risk premia requires a lessening of the US economy's downside risks.

24-MAR-08 United States
The current recession may be comparatively mild according to now rising share prices and the slope of the Treasury yield curve, never mind the extraordinary efforts to boost liquidity and forthcomong fiscal stimulus. Feb-08's monthly rise by existing home sales preserves the possibility of a stabilization of home sales by mid-2008.

21-MAR-08 United States
A closed U.S. market offered breathes of fresh air after a week of great volatility. The cut in the federal funds rate on Tuesday offered some short-term relief to the 30-year treasury rate as the LIBOR rate continues to decline. With the PPI coming in lower than expected it is safe to say that at this time regulatory bodies will maintain their focus on the deteriorating residential markets and not on the dissipating inflation concerns.

20-MAR-08 United States
Today's severe bout of home price deflation may lack precedent going back 70 years, but comparatively healthy corporate finances and the still robust growth of dynamic emerging market economies also distinguish the US economy�s current slump from previous downturns.

19-MAR-08 United States
Fear still grips the financial markets. Nonetheless, despite extraordinarily wide offering yield spreads over Treasuries (that might well be significantly thinner a year from now), US investment grade companies issued at least $5.5 billion of bonds today. Once again, new high yield offerings were absent.

18-MAR-08 Europe
The Bear Stearns collapse continues to unnerve financial markets. The loss of trust and the need for banks to hoard cash has strained short-term money markets as libor rates remain elevated. The widely expected cut by the Federal Reserve should restore some confidence in financial markets.

18-MAR-08 United States
Today's equity market rally highlighted the effectiveness of the Fed's latest rate cut and policy statement ... Fed policy is very much geared towrad boosting the market value of US common stock.

17-MAR-08 Europe
Financial markets reacted negatively to the bailout of Bear Sterns, and the liquidity injections provided by the Federal Reserve and major central banks. This suggests that the worse is far from over yet, and more casualties will likely emerge.

14-MAR-08 Europe
An ECB interest rate cut could ease inflationary pressures in the euro zone and push up short dated bond prices further. As a rate cut will cause the dollar to weaken, helping to reduce the pressure off rising oil prices, which are priced in dollars.

13-MAR-08 Europe
The euro zone yield curve seemed to have stabilized somewhat on recent euro zone data releases, which showed the economy remain resilient. The flattening of the yield curve is likely to be temporary however, we expect further steepening.

12-MAR-08 Europe
European debt issuances weakened in February, and are likely to remain so in the short-term. The European Central Bank will likely cut interest rates during mid-year; this should help to restore confidence in the issuance markets.

11-MAR-08 Europe
Europe's central banks turn to open-market operations today as liquidity stay painfully absent in financial markets.

10-MAR-08 Europe
Interbank rates will remain elevated in Europe. The ECB remains hawkish regarding inflation, despite increased concerns over the euro's exchange rate whilst commercial banks remain risk averse.

06-MAR-08 Europe
The yields curve for the bund continue to steepen as markets expect the euro zone economy will slow and interest rates will be cut later this year. The implied interest rates on euro futures rose since last Friday to 4.20% from 4.11%, suggesting the probability of an ECB rate cut by mid-June may be too early, and it could be delayed until the third quarter.

05-MAR-08 Europe
Euro and sterling short-term money market rates are rising again. Financial institutions are hoarding cash once again and limiting short-term borrowing to other financial institutions as they grapple with sub prime related losses.

04-MAR-08 Europe
European government bonds strengthened today as investors sold on weaker economic data from the euro zone. Fourth quarter GDP figures for the euro zone was revised downwards, a reflection that economic activity is slowing. Nervous investors moved out of equities and into safe havens, resulting in falling yields.

03-MAR-08 Europe
Financial markets are now focusing on the BoE and ECB monetary policy decisions this Thursday. This is likely to be bad news for bunds and gilts, since both central banks are expected to keep rates on hold.

28-FEB-08 Europe
European bourses were hit by the rapidly rising price of Europe's benchmark Brent crude oil (forward dated), reaching a fresh high of just over $100 per barrel on Thursday.

27-FEB-08 Europe
We have noted for some time now that the relative strength of the euro has much to do with the prevailing weakness of the U.S. economy. Yesterday�s string of bad news did little to help the greenback, sending the euro to a record high $1.5057 in early European trading.

26-FEB-08 Europe
European government bonds weakened on the back of a rebound in the German IFO business sentiment index. Despite the surprise rise in confidence, the fourth quarter GDP for Germany, the euro zone�s largest economy shows signs of weakening. The bund has weakened temporarily, given a further slowdown in economic activity is expected this year, the trend for the performance of the bund remain on the upside.

22-FEB-08 Europe
European government bonds rose today as investors brought bonds on the back of falling equities. The release of weak earning results as well as downward revisions to earning estimates across the Atlantic has spooked financial markets, resulting in investors buying into safe haven assets.

21-FEB-08 Europe
Short-and long dated gilts weakened on stronger U.K. retail sales data, pushing up yields. Though, this scenario is unlikely to last, given U.K. growth is expected to slow. The likely slowdown will put downward pressure on yields. We expect gilts will outperform equities in the short term.

20-FEB-08 Europe
European government bonds weakened today as investors sold on the release of stronger economic data which show inflationary pressures remain elevated. The euro zone producer prices rose by more than expected, whilst the short-and long dated gilt fell on stronger U.K. M4 money growth data. Yields on government bonds rose, resulting in falling prices.

19-FEB-08 Europe
European government bonds have continued to weaken as investors take advantage of rising equities. Despite, the continuance of sub prime write-downs by the banking sector, equities have risen on the back of the commodity sector. Yields on government bonds rose today, resulting in falling prices.

18-FEB-08 Europe
Gilts weakened as investors sold out of safe haven assets to take advantage of gains from European equities. The FTSE gained on announcements of dividend increases by some financial institutions, signalling that the worse may be over and that we may have seen the last of sub prime write-downs for the U.K. banks. Yields on government bonds rose, resulting in falling prices.

15-FEB-08 Europe
European government bonds strengthened today as investors sold out of equities on reports of further sub prime write-downs. Yields on government bonds fell, resulting in rising prices.

14-FEB-08 Europe
Despite the slowdown in the euro zone as reflected by the release of the flash estimate for fourth-quarter GDP, government bond prices faltered. It seems investors are focusing their concern on rising inflationary pressures. Preliminary euro zone CPI for February shows a rise in consumer prices. The yield on a bund for both the short-and long dated maturities rose as a result.

13-FEB-08 Europe
The yield on the short-dated gilts rose on the release of stronger U.K. employment data. Furthermore, today�s inflation report signalled that the BoE may not cut interest rates by as much as financial markets expect, putting further pressures on the yield.

12-FEB-08 Europe
The yield on a short-and long dated gilt rose sharply today on the release of U.K. CPI numbers, which showed consumer prices rising. This has reduced the BoE's ability of cut rates aggressively in order to shore up weakening growth. We expect however, government bonds will continue to outperform equities this quarter, as investors demand for safe haven assets is unlikely to wane.

11-FEB-08 Europe
The yield on a short-and long dated gilt rose sharply today on the release of U.K. PPI numbers which showed producer prices accelerating. This has reduced the BoE's ability of cut rates by more than projected in the face of weakening growth. We expect however, government bonds will continue to outperform equities this quarter, as investors demand for safe haven assets is unlikely to wane.

08-FEB-08 Europe
Euro zone government bonds continued to strengthen, as risk adverse investors move out of riskier assets. The yields on the euro zone government bonds vary however, as investors differentiate on the relative performance of the euro zone economies and the soundness of their fiscals.

07-FEB-08 Europe
European bonds gained on Trichet�s speech which signalled that monetary policy may possibly be loosened on weakening euro zone outlook. The spread differential on the 2-and 10 year bunds widened by 13 basis points as investors expect short term ECB rates to fall.

06-FEB-08 Europe
The U.K. gilt is likely to outperform on the expected BoE rate cut tomorrow. Further rate cuts are expected. We anticipate U.K. monetary policy rates will be at 5.0% by year end. The slowdown in the U.K. economy as well as the possibility of a U.S. recession will likely provide further support to the performance of safe haven assets such as government bonds this year.

05-FEB-08 Europe
European bonds strengthened today on the release of softer euro zone services PMI data. Investors are now increasingly focused on the possibility of an ECB rate cut during the third quarter as the euro zone growth weakens, weighed down by the increasing possibility of a U.S. recession. This resulted in yields falling on both the short-and long dated bonds.

04-FEB-08 Europe
European government bonds weakened on stronger euro zone producer prices. Investors seemed to be concerned about inflation rather than further deceleration in the euro zone economic growth. This resulted in a rise of short-and medium term yields as investors moved out of bonds.

01-FEB-08 Europe
Borrowing costs in the U.K. are beginning to loosen, with the 3 month sterling Libor now 5.6%, from 6.6% in December. The BoE will cut its base rate by 25 basis points next week. For more, please see Special Comments, European Credit Trends - 2007 Review & 2008 Outlook.

31-JAN-08 Europe
Spreads will remain high for European corporate issuers, even if European central banks lower their interest rates. For a full analysis, please see Special Comments, European Credit Trends - 2007 Review & 2008 Outlook.

30-JAN-08 Europe
Rising downside risks to economic growth in the euro zone, with rapid currency appreciation hastened by further interest rate cuts from the U.S. Federal Reserve, may be changing attitudes at the European Central Bank. If tomorrow's flash consumer price inflation estimate for January shows no further acceleration, the ECB may start considering a rate cut of its own.

29-JAN-08 Europe
ven though interest rate futures showed markets had already priced in cuts from the U.S. Fed and the Bank of England, bond markets reacted sharply today. Gilt yields increased throughout the day, with the U.K.'s 2 and 10-year benchmark bond yields each tacking on 10 extra basis points. The modest improvement in credit quality perceptions was also reflected by a slip in credit default swap indices.

28-JAN-08 Europe
Homeowners in the U.K. are heavily indebted, facing high interest rates, a softening housing market, and weaker employment growth. All this points to reduced consumption growth and gives the BoE room to ease. Markets expect the BoE to cut its base rate by a quarter point in February, with a second quarter-point cut in June now anticipated.

23-JAN-08 Europe
European equity markets remain unsettled as investors worry about the increasing likelihood of a U.S. recession. Economic data signal that the U.S. is moving in that direction, and could even possibly be in recession. Corporate credit and equity markets are on two sides of the same coin when the economy is slowing. A slowdown in activity will result in rising defaults, a widening of spreads and falling bond prices. European credit markets continue to weaken, this time it may be the possibility

22-JAN-08 Europe
Markets are likely to turn their collective attention toward whether or not the Fed's 75 basis point cut suggests that the central bank knows more than it is letting on, and whether or not European central banks will follow suit.

21-JAN-08 Europe
The increasingly uncertain outlook surrounding U.S. and European growth prospects offered fresh support to U.K. and euro land fixed income markets, with gilts and bunds trading higher to the detriment of equity bourses.

18-JAN-08 Europe
European bourses continued to take a battering as nervous investors moved out of risky assets and sought safe havens. The yields on short-dated euro zone government bonds continue to fall despite lack of European economic data released today. Weakening economic outlook rather than rising inflation remain the key concern.

17-JAN-08 Europe
Euro Libor spreads has narrowed against the ECB base rate, a reflection of easing tensions in the short term financing markets. However, European CDS spreads for senior financials continue to rise, suggesting whilst short term liquidity might be easing, the likelihood of defaults on the European financial sector are rising.

16-JAN-08 Europe
European fixed income strengthened again on slower price growth. German CPI released showed inflation easing whilst overall euro zone CPI remains stable. The yield fell as a result, providing strong gains for short dated two year government bonds.

15-JAN-08 Europe
Investor�s confidence took another battering today on the release of the German ZEW indicator. European government bonds advanced again as a result, resulting in yields falling on both the short and long dated end.

14-JAN-08 Europe
European government bonds continue to strengthen as risk adverse investors move into safe haven assets. The yields fell on short-dated bonds as a result. The fall in yields on short dated bonds is also a reflection of falling interest rate expectations as investors expect the euro zone economy to slow down this year.

11-JAN-08 Europe
Short-dated European government bonds strengthened today as risk adverse investors sought safe haven assets. Investors moved out of equities which have performed dismally recently weighed down by the deteriorating U.S. economic outlook as well as inflation. Yields on two year European bonds were lower, whilst on the long-dated bonds were mostly flat today.

10-JAN-08 Europe
European bond yields were little changed today as the BoE and ECB held rates steady earlier on Thursday and as widely expected. Markets expect the BoE to cut rates two more times before June. The long-dated gilt will continue to be supported by softening interest rate expectations as well as weakening economic fundamentals.

09-JAN-08 Europe
European government bonds strengthened today on weaker German retail sales and industrial production numbers. Yields fell as a result. Markets are now waiting for tomorrow�s monetary policy decisions by the BoE and ECB. A hold on rates is expected; this will put further downward pressure on yields.

08-JAN-08 Europe
European government bonds continued to weaken on stronger than expected German manufacturing data. Investors are increasingly concerned about inflation rather than a slowdown in the euro zone economy, resulting in yields rising.

07-JAN-08 Europe
European government bonds weakened on stronger than expected euro zone producer prices. Investors are increasingly concerned about inflation rather than a slowdown in the euro zone economy, resulting in yields rising. The ECB is expected to hold interest rates when they meet this Thursday, which could put increasing upward pressure on yields.

07-JAN-08 Europe
The European Central Bank is widely expected not to lower its interest rate at its first monetary policy meeting of the year this Thursday.

04-JAN-08 Europe
U.K. wages surprises on the upside. This makes the BoE job more difficult when meeting next week to decide on interest rates. A cut may be necessary to alleviate problems in the financial markets. Investors on the other hand, continue to be worried about the weakening economic outlook, as a result yields on the long dated gilt have fallen.

03-JAN-08 Europe
Investors continue to be nervous on the outlook for the U.S. economy. The recent surge in oil prices has not resulted in government yields rising, suggesting that investors are more worried about softening economic fundamentals rather than inflation.

02-JAN-08 Europe
Investors are becoming increasingly nervous on the outlook for the U.S. economy; resulting in falling yields on government bonds issued by European countries. Yields will fall further on safe haven assets this year as the euro zone economy slows down and the ECB cut interest rates.

31-DEC-07 Europe
Short-term money market rates have continued to ease thanks to the concerted intervention by major central banks. The fall in short-term rates is good news for the banking sector and should help to support lending activity. If short term lending rates continue to ease, this will give a boost to equities which have performed dismally over the last four months.

28-DEC-07 Europe
Investors sold out of risky assets such as equities and brought safe haven assets on weaker U.S. new home sales. The deteriorating outlook for the U.S. economy resulted in the strengthening of U.S. as well as European government bonds.

27-DEC-07 Europe
Investor confidence continued to buoy as European bourses gained this week, whilst a shift away from government bonds reflects investor unease of inflationary pressures across the euro zone. Yields rose whilst prices fell as a result on longer dated government bonds.

24-DEC-07 Europe
Investor confidence seems to have regained as European bourses rallied today, whilst a shift away from government bonds reflects their continued unease of inflationary pressures across the euro zone. This resulted in yields rising whilst prices falling on long dated government bonds.

21-DEC-07 Europe
Renewed sentiment boosted European equities today. This resulted in investors moving out of safe haven assets such as government bonds, leading to rising yields and falling prices.

20-DEC-07 Europe
Expectations have risen that the BoE has more rate cuts in store as it seeks to stave off softer economic growth, shore up softening housing markets and perhaps even increase financial market confidence by un-sticking some of the ongoing tightness in short-term money markets.

18-DEC-07 Europe
Liquidity offerings by the ECB and BoE had a mildly positive impact on short-term lending rates today. The loans are not intended to increase longer-term credit availablility, but instead to ease flows over the next few weeks, thus boosting confidence within the financial sector.

17-DEC-07 Europe
World equity markets took a battering today as investors reacted to rising inflation and recession fears. European fixed income strengthened as risk adverse investors sort safe havens such as government bonds, resulting in falling government bond yields.

14-DEC-07 Europe
Markets remain stubbornly fixated on the downside, with uncertainty placing continued upward pressure on Libor rates.

12-DEC-07 Europe
The increased size of European central banks' planned open market operations in December and January are meant to ease credit conditions through the holiday period. With interbank rates still elevated for fixings with more than a 1 month maturity, European banks and investors remain risk averse.

11-DEC-07 Europe
Credit conditions remain tight in the euro zone and in the U.K., with the 3-month Euribor and Libor rates increasing throughout the day. The high cost of borrowing has eroded sentiment amongst firms, and their soured outlook, according to the German ZEW, reinforces banks' incentive to raise lending rates.

10-DEC-07 Europe
Credit conditions will remain tight in the euro zone, with the European Central Bank prepared to hold its interest rate steady in response to expanding money supply and rising inflationary pressures, while banks remain on guard and reluctant to lend.

07-DEC-07 Europe
European bourses remained in positive territory by the end of the trading week, doing so on the back of the BoE�s cut and ECB�s slightly softer stance, both of which offered corporates some much needed reprieve.

06-DEC-07 Europe
European government bonds weakened on stronger economic releases. Investors also became unnerved on some policymakers' decision on the ECB monetary policy committee for a rate hike, as a result yields rose.

04-DEC-07 Europe
Libor came under continued pressure on Tuesday, rising a further 2 basis points to 4.86%, a seven year high. At 86 basis points higher than the ECB�s benchmark rate, borrowing in euro�s is becoming increasingly expensive and thus, increasingly prohibitive.

03-DEC-07 Europe
The BoE (along with the ECB and U.S. Fed) offered additional liquidity to the market last week. While this was an attempt at ensuring adequate funding is on hand over the Christmas break, the offering itself raised fears over liquidity constraints, sending bank rates sharply higher.

30-NOV-07 Europe
Investors continue to sell out of European government bonds on expectation of a Fed rate cut, boosting equities. This resulted in rising bond yields.

29-NOV-07 Europe
Investors moved out of safe haven assets such as European government bond and into equities on expectations that the Fed will likely cut rates soon. As a result, bond yields fell and prices rose.

28-NOV-07 Europe
European bonds weakened today on stronger than expected euro zone economic data leading to rising inflationary expectations. As a result, investors sold out of bonds and yields rose.

27-NOV-07 Europe
European government bonds weakened today on higher than expected German CPI numbers. As a result, investors moved out of bonds on higher inflationary fears.

26-NOV-07 Europe
Investors shunned riskier assets such as equities as bail outs relating to the sub prime continue in the banking sector, this resulted in the strengthening of government bonds. As a result, yields fell.

23-NOV-07 Europe
Early next week markets will look out for the German Ifo and inflation report, which may give clues regarding economic growth in the euro zone and indeed, the ECB's next decision for monetary policy.

22-NOV-07 Europe
Risk adverse investors continue to move out of riskier assets such as equities due to increasing uncertainties surrounding possible losses from the sub prime. They chose instead to invest in safe haven assets such as European government bonds resulting in rising bond prices.

21-NOV-07 Europe
The BoE voted 7-2 to hold its main interest rate in November, from 8-1 in October. The extra vote came from the financial markets member, John Gieve, and may signal tough times ahead for financial markets. With future economic growth thrown into question, gilts continued to rally.

20-NOV-07 Europe
European banks continue to battle the credit crunch, as write-downs of debt aggravate interbank lending rates. This was particularly pronounced in the U.K., and helped raise the 2-year gilt. Inflation remains a key concern in the euro zone area, putting pressure on euro zone bonds; yields on euro zone bonds increased only slightly, as investors remain averse to equity markets and prone to fixed income.

19-NOV-07 Europe
Softness in the U.K. housing market is spurring sellers to agree to lower prices. Following a year of strong house price growth and mortgage borrowing, homeowners are increasingly pressured by higher interest rates and limited wage growth.

16-NOV-07 Europe
Although euro zone growth prospects remain relatively upbeat, softening business expectations and still weak investor sentiment are weighing heavily on markets' collective mind.

15-NOV-07 Europe
European government bonds strengthened on global equity weakness as investors pulled out of riskier assets and into safe haven ones.

14-NOV-07 Europe
Gilts reversed earlier losses as the Bank of England's quarterly inflation report suggested that a quarter point hike may well be on offer come 2008.

13-NOV-07 Europe
U.K. interest rate futures fell for a second day on Tuesday as strong inflation data dampened expectations of a near-term cut in interest rates from the Bank of England.

12-NOV-07 Europe
Expectations that lower earnings from European corporates are adding to views that the global expansion will slow at a faster than expected pace, limiting the ECB�s willingness or ability to hike rates.

09-NOV-07 Europe
Yields on European government bonds continued to fall on softer euro zone economic releases, resulting in rising bond prices.

08-NOV-07 Europe
European government bond yields fell on announcements by both the EcB and BoE to keep rates unchanged today and on softer U.K. house prices. Bond prices strenghtened as a result.

07-NOV-07 Europe
On trend, sterling has risen in dollar terms all year, supported by increased BoE interest rates and strong economic growth.

07-NOV-07 Europe
Bonds strengthened today, as investors turned from the equity markets. Inflation pressures are mixed with upside pressures stemming from higher oil prices and downside pressures from currency appreciation; the ECB and the BoE will hold fire. Further guidance will come from the ECB's post-match speech and Q&A session.

05-NOV-07 Europe
Weakening U.K. economic releases eased inflationary expectations today, resulting in falling yields and rising gilt prices.

02-NOV-07 Europe
A decline in the euro zone's manufacturing PMI followed a similarly weak report for the U.K.; the ECB and BoE will hold their interest rate targets steady through the remainder of the year as slower growth eases inflationary pressures.

02-NOV-07 Europe
The slide in equities and throughout financial markets has warmed investors to fixed income, allowing yields to fall the board. The decline in the euro zone's manufacturing PMI followed a similar report for the U.K.; central banks will hold their interest rate targets steady as slower growth eases inflation pressures.

01-NOV-07 Europe
Gilts recovered following yesterday�s sell-off on falling U.K. manufacturing PMI. This eased inflationary pressures and resulted in yields falling.

31-OCT-07 Europe
European government bonds continue to weaken on strong euro zone economic releases, causing rise inflationary expectations, as a result bond yields moved up.

30-OCT-07 Europe
Investors continue to sell government bonds today following a series of strong economic data releases including German employment numbers, which fuelled inflationary expectations.

29-OCT-07 Europe
The yield on a 10-year bund rose on elevated euro zone consumer prices in early morning trade. Though, during afternoon trading the bund recovered some of its losing ground driven by expectation of a Fed rate cut, prompting a mass buying of government bonds across the board.

26-OCT-07 Europe
Investors bought on weakening consumer sentiment and slight easing of euro zone money growth; European government bonds strengthened as a result.

25-OCT-07 Europe
Yields on European government bonds rose on rising inflationary risks in the euro zone. Investors responded by selling out of bonds.

24-OCT-07 Europe
Our Q3 special comment report "Western European Credit Quality Declines Amid Credit Market Turmoil" is out now.

23-OCT-07 Europe
Interest rate futures suggested traders have upped the ante in terms of expectations for a Fed cut at the end of this month, boosting the FTSE 100 and adding fresh wind to sterling�s sails.

19-OCT-07 Europe
The euro and the pound should maintain at elevated levels against the dollar, as inflation pressures in both areas are still present.

18-OCT-07 Europe
European government bonds strengthened on Thursday, extending yesterday's trend on the back of euro zone construction report which suggested activity in the sector has peaked.

17-OCT-07 Europe
Euro zone government bonds strengthened on softer house price growth leading to investors reducing their inflationary expectations and falling yields.

16-OCT-07 Europe
European government bonds weakened as a strong rise in euro zone consumer prices stoked investors' fears, leading them to selling out of bonds.

15-OCT-07 Europe
UK gilts weakened today on U.K. house price release which has continued to strengthen despite rising borrowing costs resulting from high money market rates.

12-OCT-07 Europe
European government bonds weakened on Friday due to stronger inflationary expectations in the euro zone and the subsequent reversal of investors positions.

11-OCT-07 Europe
European consumer prices released today have shown price pressures remain a concern, resulting in the weakening government bonds.

10-OCT-07 Europe
The governor of BoE signalled his reluctance today to cut rates in order to bail out financial institutions who take excess risk, yields on U.K. gilts rose as a result, leading to losses for investors.

09-OCT-07 Europe
The U.K. pre-budget report released today signals lower expected growth for next year. U.K. gilts rose as a result and yields fell, reflecting a dampening of inflationary expectations.

08-OCT-07 Europe
Expectations for slower growth in the U.K. and the notion that this will underpin the justification for a cut in U.K. interest rates saw the pound lower against the dollar today.

04-OCT-07 Europe
Increased transparency as opposed to rate cuts and additional liquidity offerings will prove the ultimate solution to the prevailing credit mess.

04-OCT-07 Europe
Increased transparency as opposed to rate cuts and additional liquidity offerings will prove the ultimate solution to the prevailing credit crunch.

02-OCT-07 Europe
While the long term trend in the EURUSD cross remains on an upward drift, this Thursday�s ECB interest rate announcement is expected to prove an obstacle to further near term gains for the pair.

01-OCT-07 Europe
Easing U.K. PMI suggests a slowing economy. This will help to reduce inflationary expectations resulting in rising bond prices.

28-SEP-07 Europe
European government bonds continued to strengthen on weakened euro zone economic releases. Gloomier business and consumer confidence and falling producer prices have reduced inflationary expectations resulting in falling yields.

27-SEP-07 Europe
Rebound in the European fixed income and equity markets reflect rising investor confidence and that we may have seen the worse of the credit market turmoil. This will be good news for corporate bonds.

26-SEP-07 Europe
Sterling money market rates continued to fall since hitting a peak in mid September, a reflection that much needed liquidity is returning to the short term financial markets. This will help to ease the pressure off corporate bond spreads.

25-SEP-07 Europe
The yield differential between a two-year and ten-year bund have widened lately reflecting rising inflationary fears.

24-SEP-07 Europe
European government bond yields continue to increase on expectations that ECB interest rates have peaked, giving fears that inflation may rise.

21-SEP-07 Europe
With softer inflation data for August released this week butting heads with stronger than expected retail sales growth for the same month, it is too early to make a call as to whether the BoE will opt to follow the Fed�s lead and cut rates any time soon.

20-SEP-07 Europe
Sterling has declined more than 3.0% vis-�-vis the euro this month on the back of confusion and uncertainty in the U.K. surrounding the credit turmoil and indeed how the Bank of England would react.

19-SEP-07 Europe
Just last week the governor of the BoE, Mervyn King suggested that widening the collateral accepted by the bank or offering money for �longer periods� would risk �moral hazard�. The events of the past week and heightened tension over the Northern Rock episode in the past days have clearly changed the state of play.

18-SEP-07 Europe
An "extraordinary" offering of funds by the BoE combined with a U.K. government guarantee to Northern Rock investors restored a measure of calm to U.K. markets today.

17-SEP-07 Europe
U.K. lender Northern Rock grew quickly based on its non-traditional business model of funding mortgages by borrowing in commercial-paper markets which are now essentially closed.

14-SEP-07 Europe
The Northern Rock bailout by the Bank of England this morning rocked financial markets. Government bonds advanced as the news increased demand for government debt.

12-SEP-07 Europe
European government bonds underperformed today. This reverses all the gains made yesterday as investors reduced their exposure to safe haven assets on expectations of a rate cut by the FED next week.

11-SEP-07 Europe
European government bonds underperformed today as investors sold out of bonds on Trichet's hawkish speech to the European parliament. This raises the certainty of another rate hike by the ECB before the year end.

10-SEP-07 Europe
European government bonds outperformed today as investors sought safe haven assets due to rising uncertainty over the U.S. economy and its possible impact on the euro zone.

07-SEP-07 Europe
Risk aversion remains heightened due to ongoing financial market turmoil and weak U.S. data resulted in widespread buying of European government bonds today.

06-SEP-07 Europe
The ECB may have opted to hold its refi rate steady at 4.0% today though Trichet's hawkish statement keeps the possibility of a hike to 4.25% very much on the table.

05-SEP-07 Europe
Financial markets will focus on today's monetary policy meetings by the BoE and EcB. Our expectations are for interest rates to remain unchanged for U.K. and the euro zone. This should give some support to bond prices which have taken a battering since late June.

05-SEP-07 Europe
Financial markets will focus on today's monetary policy meetings by the BoE and ECB. Our expectations are for interest rates to remain unchanged for U.K. and the euro zone. This should give some support to bond prices which have taken a battering since late June.

04-SEP-07 Europe
Short term money market rates remain at a historical high, a reflection of continued risk aversion. This increases the chance of temporary seizing up of liquidity, giving rise to a credit crunch as sellers of risky assets are unable to obtain short term borrowing.

03-SEP-07 Europe
The revival of M&A activities and strong sector performance have boosted European equities resulting in investors selling out of less risky assets such as government bonds and buying higher yielding assets such as equities, resulting in declining bond prices.

31-AUG-07 Europe
The unwinding of the carry trade means higher yielding currencies such as the euro and sterling continue to weaken against lower yielding currencies such as the yen and swissie.

30-AUG-07 Europe
U.K. lending and house price data released this morning revealed more mortgages than expected were approved in July, supporting the view that the housing market may not cool for some time yet.

29-AUG-07 Europe
Credit jitters will almost certainly continue to place pressure on the pound as markets remain uncertain over exactly what impact the sub-prime fall out will eventually have.

28-AUG-07 Europe
Softening tone by Trichet on ECB monetary policy reduces the certainty of an eminent hike widely expected next month. This will provide some support to the weakening corporate bond markets resulting from the sub prime fallout.

24-AUG-07 Europe
Investors continued to turn back towards European assets on Friday, boosting equity markets and lifting the euro and the pound.

23-AUG-07 Europe
Given the health of the U.K. economy, its general resilience to previous interest rate hikes, and the reinstatement of investors' positive sentiment, the BoE is likely to hold steady at its next meeting, though signal a hawkish tone in the subsequent minutes.

22-AUG-07 Europe
Restored confidence as reflected by rising European bourses resulted in investors moving away from safe haven assets such as government bonds today.

21-AUG-07 Europe
European government bonds continue to strengthen today on increasing investor risk aversion resulting from the sub prime fallout.

20-AUG-07 Europe
Another European bank bailout resulted in risk averse investors to move into safe haven assets such as government bonds causing bonds to perform strongly.

17-AUG-07 Europe
Fed rate cut today results in equities to recover. However, increased risk aversion has meant continued unwinding of excesses resulting in widening of bond spreads.

16-AUG-07 Europe
Rising concerns over further sub prime fallout has led to another day of huge equities sell off, whilst safe haven assets such as government bonds gain.

15-AUG-07 Europe
Jitter in the sub-prime market has led to continued buying of safe haven assets such as European government bonds by investors.

14-AUG-07 Europe
Easing U.K. inflationary pressures as indicated by the CPI data released today suggests an expected interest rate hike to 6.0% may be delayed.

13-AUG-07 Europe
UK PPI figures have proven mildly less inflationary than the Bank of England has thought, easing the pressure for a near-term interest rate hike.

10-AUG-07 Europe
The sheer fact that the ECB has been forced to provide short term liquidity has intensified nervousness surrounding the U.S. sub-prime fall-out.

09-AUG-07 Europe
The ECB's increase in the overnight rate signals that banks are reducing the supply of money as losses (and concerns about bigger ones to come) triggered by the U.S. mortgage slump spread to Europe.

08-AUG-07 Europe
The Bank of England's August Inflation Report gave no suggestion that it will definitely rise to (or indeed, above) 6%, but rather made noises that a hike could come in early 2008, rather than the end of 2007.

06-AUG-07 Europe
Fear surrounding U.S. mortgage markets continues to batter European and Asian equities. It is worth keeping in mind, however, that the outlook for U.S. economic growth remains firm.

02-AUG-07 Europe
European bourses continue to improve as company earnings prove a correction, as opposed to a major credit crunch, is under way.

01-AUG-07 Europe
Although no changes to interest rates are expected to be made on either side of the channel in August, post meeting verbiage from the ECB should give clues as to the timing of that bank's next move.

31-JUL-07 Europe
Investors took profits on European government debt today as upbeat earnings news and easing credit fears boosted regional equity markets. Gilt futures extended the prior day�s losses.

27-JUL-07 Europe
European bourses head for their biggest week of losses since March on Friday as fears over financing conditions within credit markets dampen expectations for continued M&A activity.

26-JUL-07 Europe
Equity market jitters continue to send investors toward safe-have government debt.

25-JUL-07 Europe
Gilts rose to near seven week highs as weak U.S. home sales data kept demand for safe-haven government debt very much alive.

24-JUL-07 Europe
Sub-prime woes continue to drive investors toward safe-haven European government bonds.

20-JUL-07 Europe
The MPC is likely to remain neutral for at least several months, taking its time in assessing the reaction of the domestic economy as it adjusts to the latest rate hike.

18-JUL-07 Europe
U.K. gilts rose after minutes of the Bank of England's last rate setting meeting showed a 6-3 split on hiking interest rates. The 10-year gilt rose 0.42 to 89.84, while the September short sterling futures contract rose 0.01 to 93.80.

17-JUL-07 Europe
Weighed down by a record �1.3 trillion pounds in debt, higher U.K. borrowing costs will deter spending by consumers, resulting in slower economic growth.

12-JUL-07 Europe
Read our European Credit Trends Special Comment for Q2 "spec grade shines but M&A and wider spreads threaten a tumble", published yesterday.

10-JUL-07 Europe
The euro has hit a new record high against the dollar, which will grieve some politicians, but it is mostly market volatility.

09-JUL-07 Europe
The recovery in petrol prices will aggravate pricing conditions in the U.K., though so far producers have struggled to pass-through higher input costs.

05-JUL-07 Europe
Monetary policy continues to tighten in Europe, but policymakers are getting hedgy suggesting the peak is not far off.

03-JUL-07 Europe
The failure of European firms to hike output costs, alongside the upswing in wage inflation, could have deletrious effects on fixed investment.

29-JUN-07 Europe
All the dominoes are lining up for very slow private spending growth in the U.K. next year.

27-JUN-07 Europe
Ongoing concerns over just how far subprime mortgage problems could hurt the broader U.S. economy continued to pressure debt, sending gilts, Bunds and Treasuries higher in early trade.

26-JUN-07 Europe
The relative strength of Europe's currencies is doing some of the monetary authorities' work for them.

25-JUN-07 Europe
There is mounting evidence that the half-decade retreat in German real wages is over.

21-JUN-07 Europe
Although British interest rate futures pared losses and gilt returned to positive territory in late trade, tracking a global move higher, the prospect of rising interest rates is weighing on the outlook.

20-JUN-07 Europe
Bunds fell in line with gilts and Treasuries mid-week, all tracking lower on the market's increasingly bearish bias given renewed concerns about rising global interest rates.

18-JUN-07 Europe
A further rise in yield for the 10-Year Treasury and German Bund, on the back of a continued selloff in debt markets, could see European indicies continue to trend downward in the coming days.

15-JUN-07 Europe
European bonds declined throughout the week as reports showed German business confidence at the highest since the country's reunification in 1990 and euro-region inflation near the ECB's 2.0% threshold, fuelling expectations of rising borrowing costs.

14-JUN-07 Europe
The yield in European bonds continues to rise unabated resulting from a re-assessment of stronger economic growth and higher interest rates.

11-JUN-07 Europe
Upswing in U.K. factory gate inflation so far fails to reflect the increase in pricing pressure feared by the central bank.

08-JUN-07 Europe
Tight spreads on Euro-denominated corporate bonds despite ECB rate hike suggest investors remain confident on the prospects for euro zone firms.

07-JUN-07 Europe
The most significant for sterling and gilts today will be the BoE monetary policy meeting.

01-JUN-07 Europe
European producers are exercising a greater degree of pricing power, which will keep central banks on their toes.

31-MAY-07 Europe
British households are confident, but in order to remain so they apparently intend to minimize spending and increase savings.

30-MAY-07 Europe
Sterling's negative sentiment was compounded by a comment from the BoE�s �ber-dove, David Blanchflower, who hinted that another rate hike in the U.K. is not a certainty.

29-MAY-07 Europe
ECB Governing Council member Axel Weber's suggestion that interest rates could be lifted into �restrictive� territory in order to control inflation will continue to place pressure on euro debt markets throughout the coming days.

23-MAY-07 Europe
If the BoE had wanted a near-term rise to 5.75%, they would have opted for a half-point hike in May.

22-MAY-07 Europe
Further ECB rate hikes will fail to dampen German corporate optimism.

21-MAY-07 Europe
Dip in house price data in the U.K. is supply driven and not yet the inflection point in the housing boom.

16-MAY-07 Europe
As the BoE says, the degree of uncertainty is higher than normal, but the short-termism of their commentary is aggravating this ambiguity.

16-MAY-07 United States
Mortgage applications for the purchase of a home have been firming in a manner which suggests that the demand for housing has fared relatively amid the uncertainties stemming from the subprime mortgage crisis.

15-MAY-07 Europe
It appears at the moment that the BoE has no reason to revise its forecasts in tomorrow's Inflation Report.

10-MAY-07 Europe
Credit conditions in Europe will continue to tighten into the second half of the year; broadly speaking, above-expectations growth should offset the impact of higher rates for most firms.

09-MAY-07 Europe
Unlike the BoE, the U.S. Fed is expected to hold pat at the conclusion of its policy setting meeting for May, suggesting sterling will enjoy a 25 basis point yield advantage, at least, over the U.S. dollar.

04-MAY-07 Europe
The German wage settlement is not unduly inflationary and presents a concrete hint of self-sustaining growth in the euro zone.

03-MAY-07 Europe
European bond yields edged higher on the brightening economic outlook, as global interest rate expectations surged, supported not just by the day's firmer U.S. data flow, but also by the falling euro zone unemployment rate and rising equities.

03-MAY-07 Europe
In Europe, private equity activity is likely to continue to have a small but negative influence on the credit cycle over the medium term.

03-MAY-07 Europe
In Europea, private equity activity is likely to continue to have a small but negative influence on the credit cycle.

30-APR-07 Europe
European bond yields slipped as the technicals implied that recent increases had perhaps been a little overdone.

30-APR-07 Europe
Continued upward momentum in euro zone M3 growth adds additional momentum to the case for further tightening.

27-APR-07 Europe
Technicals drove the U.S. dollar higher vis-a-vis the euro on Thursday, leaving fundamentals to completely erase those gains on Friday.

25-APR-07 Europe
The slowdown in growth rates in the more dynamic services sectors signal that growth in the U.K. has passed its peak.

23-APR-07 Europe
Higher inflation on the back of stronger German wages, combined with the decrease of corporate profitability, could widen low yield spreads and spell the end to hopes for a shift toward self sustaining growth.

20-APR-07 Europe
The fact that the manufacturing sector of the euro zone's third-largest economy continues to struggle against recession is sign that the region is not firing on all cylinders.

17-APR-07 Europe
Blowout in U.K. CPI inflation will not immediately lead to more rate hikes. This was expected and it is the pace of activity growth heading into Q2 which matters.

16-APR-07 Europe
A Bank of England rate hike will have little impact on imported raw materials prices, but it will diminish demand for such products, keeping local pricing pressures at bay.

11-APR-07 Europe
The ECB will use tomorrow's press conference to signal whether the re-adopted one hike/three months schedule (implying a rise in June) will be preserved.

10-APR-07 Europe
Germany has not yet entered a period of self-sustaining growth, but continued improvements in employment conditions will help add to private household demand.

06-APR-07 United States
Persistently strong employment will help the economy weather its areas of weakness while also reviving inflation fears.

05-APR-07 United States
One clear advantage the current US economy has over the soft landing of 1995-1996 is a milder trend in jobless claims and unemployment.

03-APR-07 Europe
Rising core industrial prices in the euro zone will ultimately impair fixed investment and business sales growth.

29-MAR-07 United States
Homebuyer mortgage applications show that the demand for housing during the early stages of housing�s peak spring selling season was up from a year earlier.

28-MAR-07 United States
The rising trend of debt and lease payment relative to disposable personal income very much limits consumer spending's upside potential.

27-MAR-07 United States
Only if home price deflation were to become a recurring phenomenon might it constitute a major recession risk.

27-MAR-07 Europe
A self-sustaining expansion in Germany would mean a sustained, above-trend euro zone expansion, which in turn could wrest further hikes out of the ECB.

26-MAR-07 United States
Despite all of the worry stemming from the contraction of the supply of subprime mortgage credit, 34 new "junk" bonds were issued in the US market raising $16.9 billion of funds through the first 23 days of March.

23-MAR-07 United States
� if the Fed is more determined to ward off a deep slide by equity prices, then Treasury bondholders are less likely to benefit from a �flight to quality�.

23-MAR-07 Europe
Going forward, the euro currency should hold onto its appreciated value vis-a-vis the U.S. dollar. This should lower the value of imports, particularly of energy, and also continue to improve portfolio investment.

21-MAR-07 United States
� home price deflation might yet wield more influence over monetary policy than core PCE price index inflation.

19-MAR-07 United States
The relative steadiness of corporate credit risk premia may help to stabilize, if not firm, equity prices.

16-MAR-07 United States
Protracted home price deflation would eventually boost the delinquency rates of prime mortgages to unexpectedly high levels and, thereby, lead to a broader contraction of the supply of credit.

15-MAR-07 United States
� the relatively modest widening of corporate credit risk premia suggests that a broad-based contraction of liquidity has yet to occur.

14-MAR-07 United States
The resilience of consumer confidence may follow from the narrowness of an otherwise intense surge in subprime mortgage repayment problems.

13-MAR-07 United States
Relatively thin high-yield spreads tend to encourage a healthy supply of business credit from banks.

12-MAR-07 United States
Expectations of substantially slower growth for mergers, acquisitions, net stock buybacks, and special dividends support the likelihood of a milder climb by nonfinancial-corporate debt.

09-MAR-07 United States
Surveys of consumer confidence offer no indication that lower home prices are significantly diminishing the spending proclivities of US consumers.

08-MAR-07 United States
A reduction in the available supply of subprime mortgage credit implies fewer home sales and lower home prices than otherwise, but it precludes neither the growth of home sales nor a stabilization of home prices.

06-MAR-07 United States
� declining share prices imply that US home sales and residential real estate prices will be lower than otherwise.

05-MAR-07 Europe
A steady downswing in U.K. services� new business inflows points to further expansion, but at a slower rate in the months ahead.

02-MAR-07 United States
This economy will not supply extraordinary support to mediocre businesses, but neither will it stress otherwise solid entities.

01-MAR-07 Europe
: European equity markets fell further in volatile Thursday trading, as the initial morning Bernanke-boost was quickly eradicated thanks to a combination of the re-surfacing U.S. inflationary threat and extended Asian stock market losses.

28-FEB-07 United States
Any slump by business investment spending may not be long lasting according to recent regional surveys of planned capital spending

27-FEB-07 United States
�surpassing the weakness in housing and manufacturing are strong rates of consumer and business spending, and favorable interest rate and inflation outlooks -- this belies the likelihood of an imminent slump of the US economy.

26-FEB-07 United States
� the greatest level of credit risk is concentrated in the firms that are takeover targets, merger seekers, or friendly to share buybacks.

23-FEB-07 United States
� the more potential homebuyers hear of repayment problems with subprime mortgages, the more likely they are to postpone a planned purchase of a home in order to better ascertain the firmness of residential real estate prices

22-FEB-07 United States
Once the median growth of profits trailed NFC debt growth by -0.7 points in 1998, a protracted credit cycle slump had arrived.

21-FEB-07 United States
� regardless of the housing cycle, homebuyer mortgage applications almost always decline sequentially in February �

20-FEB-07 United States
The breadth of the equity market�s current gains is a positive for the credit cycle.

16-FEB-07 United States
� the under-pricing of credit risk appears to be greatest at the Caa rating category.

14-FEB-07 United States
In contrast to the conventional wisdom, Bernanke stated that corporate leverage was still near historical lows.

13-FEB-07 United States
Not many employers have complained about a pressing need to either hike wages significantly or else risk a massive defection of valued employees.

12-FEB-07 United States
As inferred from the yearly growth of the US government�s corporate income tax receipts, profitability has slowed significantly, but not to a subpar pace.

09-FEB-07 United States
� the upside for interest rates remains bounded by widely held expectations of significantly slower nominal GDP growth for 2007.

08-FEB-07 United States
Problems with subprime mortgage loans imply that the US economy can ill afford either significantly higher interest rates or protracted labor market softening.

06-FEB-07 United States
Granted that the sustainability of the recent strength of most aggregate measures of nonfinancial-corporate credit worth is doubtful, that does not imply that a peaking of these ratios will quickly send the corporate credit cycle into a downward spiral.

05-FEB-07 United States
Notwithstanding the recent jump in the number of credit rating downgrades of US high-yield companies � the median expected default frequency (EDF) of the US� non-investment-grade corporations set a new record low during the first two days of February

02-FEB-07 Europe
There are signs of a slowdown in European M&A activity, as the number and value of M&A transactions have declined. This may indicate the outlook for events-driven rating changes will slow.

01-FEB-07 United States
Predicting a severe economic downturn has become as risk-laden as predicting a pronounced acceleration of price inflation.

30-JAN-07 United States
The job opportunity index still falls considerably short of where it resided when labor market tightness last compelled the Fed to implement a restrictive monetary policy in 1999-2000.

29-JAN-07 United States
� the bulk of the impetus for the lack of defaults has been the rising mountain of profits

26-JAN-07 United States
To the degree that the latest run-up by mortgage yields trims mortgage applications from potential homebuyers, renewed concern regarding the adequacy of US economic growth probably will push Treasury bond yields down from recent highs.

25-JAN-07 United States
Although shorter and milder recessions do not assure lower bond default rates, they may diminish uncertainties regarding the extent of defaults and allow financial markets to better absorb defaults.

24-JAN-07 United States
The latest thinning of already narrow high-yield spreads bodes will for equity price performance.

23-JAN-07 United States
Milder and shorter recessions imply that investors will accept lower compensation for systemic risk.

22-JAN-07 United States
Given December�s score of +0.04, it�s conceivable that the moving 6-month average of the NAI has already troughed at the -0.19 of 2006�s second half, which would lessen the need for a rate cut later in 2007.

19-JAN-07 United States
Despite very adverse developments on the housing front, the University of Michigan�s index of consumer sentiment for early January surpassed its average of 2005�s first half, or when housing was nothing less than robust, by a significant +6.4%.

18-JAN-07 United States
December�s +2.6% annual rate of core CPI inflation was above the Fed�s comfort zone, which reinforces our view that only a material softening of the labor market might prompt an easing of monetary policy.

16-JAN-07 United States
A comparatively low real federal funds rate helps to explain the abundance of financial liquidity and the extraordinary thinness of high-yield credit risk premia.

11-JAN-07 United States
Because of how initial state unemployment claims serve as a leading indicator, December�s unemployment rate of 4.5% is more likely to move lower, rather than higher, during the next 6 to 12 months.

10-JAN-07 United States
Persistently thin high yield credit risk premia would favor higher valuations for common stock.

21-DEC-06 United States
Shareholder compensation as a percent of pretax profits shows a much higher correlation coefficient of +0.71 with the Baa industrial company bond yield spread than with the high-yield spread�s coefficient of +0.50.

14-DEC-06 United States
Both December 8th�s jump by mortgage applications and November�s better than expected showing by retail sales trimmed the risks of a hard landing and lessened the need for a lower fed funds rate.

13-DEC-06 United States
The durability of the latest thinning of high-yield bond spreads is brought into question by a decline in upgrades� share of the number of US high-yield company credit rating revisions from the 49% of the year-ended Q3 2006 to the 36% of the fourth-quarter-to-date

12-DEC-06 United States
On balance, today's corporate finances seem better able to shoulder the latest wave of stock buybacks compared to the previous major buyback surges of 1999, 1989 and 1986

24-JUL-06 United States
Retail sales show stronger correlations of the expected sign with various aggregate measures of profitability than nominal consumer spending does.

21-JUL-06 United States
Retail sales show stronger correlations of the expected sign with various aggregate measures of profitability than nominal consumer spending does.