Daily Reading – January 12, 2011

FT Alphaville: Indonesian equities warning du jour

One of these is not like the others — chart from Nomura fixed income analyst Owen Job, who’s making a point about Asian inflation risk…

FT Alphaville: A gasoline snow print

And recent snowfalls across North America, it seems, have provided many with an excuse to take one. (That is, to stay at home for the day rather than to go to work or school.)

FT Alphaville: On the implications of a widening WTI-Brent spread

The spread between the two main global oil benchmarks, West Texas Intermediate and Brent, is blowing out (again).

FT Alphaville: Happy Portugal – market takes down €1.25bn of debt

The much-anticipated results of Portugal’s Wednesday bond auction are in.

FT Alphaville: Save Europe, tax the banks?

Instead of the thorough banking sector rescue which some commenters have been advocating – it looks like the European Commission could be considering the exact opposite.

FT Alphaville: EFSF 2.0

In parallel, we must ensure that the financial support mechanisms put in place last May are fit for purpose. The effective lending capacity of the current European financial stability facility should be reinforced and the scope of its activity widened. Here we need to review all options for the size and scope of our financial backstops – not only for the current ones, but also for the permanent European stability mechanism too.

FT Alphaville: A Fed on hold

Three of the four new voters are in the Soft Hawk (Kocherlakota) or Hawk camp (Fisher and Plosser). We concluded that overall the voting composition would be slightly more hawkish than the 2010 version, and could make life a bit more difficult for Bernanke if he needed to do anything bold.

China Financial Markets: China’s lending quota?

This year to everyone’s surprise the PBoC failed to announce 2011’s lending quota. Instead it announced a series of new polices aimed at monitoring the banks.

The Big Picture: The Bid Abides (48% Cash)

There are lots of near term warnings signs that caution is warranted, and a modest correction is overdue.  Volume was soft, market breadth disappointing, sentiment is frothy, and yet the downside seems to be contained.

The Big Picture: Import prices reflect growing inflation pressure

Likely in response to the persistent rise in commodity prices as just yesterday the CRB foodstuffs index reached a record high and the JOC index rose to a fresh record high for a 3rd straight day, Dec Import prices rose 1.1% m/o/m and are now up 4.8% y/o/y. Both were about in line with expectations.

Macro Man: 2011 Non-Predictions 5 – FX

Whilst the market was focused on the Portuguese auction, which the market has done its utmost to peddle as a negative outcome, we were more fascinated by this headline.



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