Treasurys & Interest Rates in the News - Treasury prices stabilized Wednesday after Federal Reserve Bank of Richmond President Jeffrey Lacker reiterated The Fed's resolve to fight inflation. He also said the government's stimulus plans are not really boosting growth.
Meanwhile, Russia's central bank plans to cut the proportion of U.S. Treasurys in its foreign exchange reserves based on media reports citing the bank's First Deputy Chairman Alexei Ulyukayev. Ulyukayev said that Russia would switch some of its reserves into bonds issued by the International Monetary Fund (IMF), according to the reports. In late May, the IMF's managing director said in a statement that Russia intends to invest up to $10 billion in the first-ever notes to be issued by the fund. As of late May, Russia's international reserves stood at $401.1 billion, the third biggest in the world.
In Europe, ECB Governing Council member Axel Weber said central banks may need to raise interest rates before inflation risks appear in order to choke off potential dangers during a a speech in Frankfurt. "The symmetrical approach to monetary policy demands that risks linked to faster money and credit growth, booming asset markets -- particularly a boom on the real estate market -- and low risk premia, need to be confronted decisively," said Weber, who also heads the German Bundesbank, according to Dow Jones Newswires. Weber said his comments shouldn't be seen in the context of the ECB's current monetary policy stance. *** Note - The ECB's focus is only on inflation, and this past Fall they were heavily criticized for not lowering rates. At the time, they continued to focus solely on inflationary pressures.
Home Depot - "The worst of the correction is behind us..." - Home Depot raised its full year profit forecasts on Wednesday. CEO Frank Blake said at the company's analyst and investor conference Wednesday that the "worst of the correction is behind us" in the housing market. Home Depot had previously forecast profit to be down 7%, and readjusted its forecast to flat to down 7%. The improved forecast was based on merchandising, operational changes, and sales that will still be down year over year, but at a better rate than previously expected.
Chrysler Deal Final - Chrysler Group LLC said Wednesday that it has finalized its global strategic alliance with Italian auto maker Fiat. The deal will see Fiat provide Chrysler with technology, platforms and powertrains for small- and medium-sized cars, as well as Fiat's international distribution network, especially in Latin America and Russia. Fiat named its chief executive, Sergio Marchionne, as the new Chrysler CEO. After coming through bankruptcy court, Chrysler is now 20% owned by Fiat, 55% by its workers' union, 8% by the U.S. government and 2% by Canada. Fiat's share could rise to 35% depending on certain milestones, though it can't obtain a majority stake until all taxpayer funds are repaid.
Gasoline Prices Slightly Higher - According to the AAA Daily Fuel Guage Report, the average retail price for a gallon of unleaded gasoline in the U.S. climbed a penny to $2.63 a gallon on Wednesday and $0.08 higher than a week ago. Gasoline sold for $2.55 a gallon a week ago and $2.23 a gallon a month ago. A year ago, gasoline cost an average of $4.04 a gallon.
Trade Gap Widens Slightly for April - The trade deficit widened by 2.2% in April to $29.2 billion, the Commerce Department said Wednesday. Exports fell faster than imports in January. Exports are now at their lowest level since July 2006 while imports have sunk to their lowest level since September 2004. Through the first four months of this year, the trade deficit was $120.4 billion, down significantly from $244.8 billion over the same period last year. The U.S. trade deficit with China narrowed to $16.75 billion in compared with $20.30 billion in the same month last year.
Meanwhile, Russia's central bank plans to cut the proportion of U.S. Treasurys in its foreign exchange reserves based on media reports citing the bank's First Deputy Chairman Alexei Ulyukayev. Ulyukayev said that Russia would switch some of its reserves into bonds issued by the International Monetary Fund (IMF), according to the reports. In late May, the IMF's managing director said in a statement that Russia intends to invest up to $10 billion in the first-ever notes to be issued by the fund. As of late May, Russia's international reserves stood at $401.1 billion, the third biggest in the world.
In Europe, ECB Governing Council member Axel Weber said central banks may need to raise interest rates before inflation risks appear in order to choke off potential dangers during a a speech in Frankfurt. "The symmetrical approach to monetary policy demands that risks linked to faster money and credit growth, booming asset markets -- particularly a boom on the real estate market -- and low risk premia, need to be confronted decisively," said Weber, who also heads the German Bundesbank, according to Dow Jones Newswires. Weber said his comments shouldn't be seen in the context of the ECB's current monetary policy stance. *** Note - The ECB's focus is only on inflation, and this past Fall they were heavily criticized for not lowering rates. At the time, they continued to focus solely on inflationary pressures.
Home Depot - "The worst of the correction is behind us..." - Home Depot raised its full year profit forecasts on Wednesday. CEO Frank Blake said at the company's analyst and investor conference Wednesday that the "worst of the correction is behind us" in the housing market. Home Depot had previously forecast profit to be down 7%, and readjusted its forecast to flat to down 7%. The improved forecast was based on merchandising, operational changes, and sales that will still be down year over year, but at a better rate than previously expected.
Chrysler Deal Final - Chrysler Group LLC said Wednesday that it has finalized its global strategic alliance with Italian auto maker Fiat. The deal will see Fiat provide Chrysler with technology, platforms and powertrains for small- and medium-sized cars, as well as Fiat's international distribution network, especially in Latin America and Russia. Fiat named its chief executive, Sergio Marchionne, as the new Chrysler CEO. After coming through bankruptcy court, Chrysler is now 20% owned by Fiat, 55% by its workers' union, 8% by the U.S. government and 2% by Canada. Fiat's share could rise to 35% depending on certain milestones, though it can't obtain a majority stake until all taxpayer funds are repaid.
Gasoline Prices Slightly Higher - According to the AAA Daily Fuel Guage Report, the average retail price for a gallon of unleaded gasoline in the U.S. climbed a penny to $2.63 a gallon on Wednesday and $0.08 higher than a week ago. Gasoline sold for $2.55 a gallon a week ago and $2.23 a gallon a month ago. A year ago, gasoline cost an average of $4.04 a gallon.
Trade Gap Widens Slightly for April - The trade deficit widened by 2.2% in April to $29.2 billion, the Commerce Department said Wednesday. Exports fell faster than imports in January. Exports are now at their lowest level since July 2006 while imports have sunk to their lowest level since September 2004. Through the first four months of this year, the trade deficit was $120.4 billion, down significantly from $244.8 billion over the same period last year. The U.S. trade deficit with China narrowed to $16.75 billion in compared with $20.30 billion in the same month last year.
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