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2 Aug 2013
Corporate Bond Premiums dropping
FXstreet.com (London) - The US is taking centre stage this week across all markets and European corporate bond yields have dropped ahead of key data today.
The Yields fell to 107.2 this week and the lowest since June 19 ahead of todays job report. This shows investors are paying attention to the ECB indicating some security as they continue to assure markets with on going stimulus measures while investors are taking peace of mind in Bernanke’s own assurances that there are still no fixed schedules for slowing their own stimulus in the US. Else where, India’s 10 yr Bonds are positioned for weekly gains and most since March 2009 as the RBI raised rates, supporting the rupee. Similarly, in Indonesia, bonds have seen their best week in 18 months while yields there are attracting global funds.
Non Farm Payrolls
Eyes are now on todays employment data from the US. Formal expectations for July non-farm payrolls comes at185k. However, the whisper number is likely to be slightly better following the positive ADP report. Analysts at Danske Bank said “We expect total payrolls to gain 175,000 in July and private job growth to reach 185,000. The service sector will remain the main contributor to job growth but the latest data from the manufacturing sector suggest that job growth in this part of the economy likely turned positive in July as well. We expect the government to continue to shed jobs at a 10,000 persons per month pace. We look for a one notch decline in the unemployment rate from 7.6% to 7.5%. This should support expectations of a September start to Fed's QE tapering”.
The Yields fell to 107.2 this week and the lowest since June 19 ahead of todays job report. This shows investors are paying attention to the ECB indicating some security as they continue to assure markets with on going stimulus measures while investors are taking peace of mind in Bernanke’s own assurances that there are still no fixed schedules for slowing their own stimulus in the US. Else where, India’s 10 yr Bonds are positioned for weekly gains and most since March 2009 as the RBI raised rates, supporting the rupee. Similarly, in Indonesia, bonds have seen their best week in 18 months while yields there are attracting global funds.
Non Farm Payrolls
Eyes are now on todays employment data from the US. Formal expectations for July non-farm payrolls comes at185k. However, the whisper number is likely to be slightly better following the positive ADP report. Analysts at Danske Bank said “We expect total payrolls to gain 175,000 in July and private job growth to reach 185,000. The service sector will remain the main contributor to job growth but the latest data from the manufacturing sector suggest that job growth in this part of the economy likely turned positive in July as well. We expect the government to continue to shed jobs at a 10,000 persons per month pace. We look for a one notch decline in the unemployment rate from 7.6% to 7.5%. This should support expectations of a September start to Fed's QE tapering”.