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Ross Kerber

UPDATE 3-Franklin Resources to buy Legg Mason in union of active management 'believers'

18 Feb 2020

Feb 18 Asset manager Franklin Resources Inc said on Tuesday it would buy rival Legg Mason Inc in a $4.5 billion deal as the two firms known for their stockpicking grapple with investors' embrace of low-cost index tracking funds.

TREASURIES-Yields decline on virus concerns and consumer data

14 Feb 2020

(Updates with market activity, analyst comment) By Ross Kerber BOSTON, Feb 14 U.S. Treasury yields declined on Friday as investors bought safe-haven government debt ahead of a long holiday weekend after soft retail sales data and on continuing caution about the coronavirus epidemic in China. The benchmark 10-year yield was down 3.7 basis points in afternoon trading at 1.5797%. Analysts cited concerns about the coronavirus in China and a report that core U.S. retail sales were unchanged for January. An issue is the uncertain long-term economic impact of the epidemic, said Bill Merz, head of fixed income research at U.S. Bank Wealth Management. "The market has really been trading on sentiment lately. That’s understandable given the general uncertainty around coronavirus," he said. He added, "We don’t see any edge in trying to predict the outcome of something like that." Traders reduced risk in their portfolios heading into the weekend, wary of what news might emerge about the virus, similar to trading on previous Fridays. U.S. markets are closed on Monday for Presidents Day. "Traders are more comfortable going into the weekend" with less risk, said James Barnes, director of fixed income at Bryn Mawr Trust. He added that many believe "There's more risk to the downside than to the upside." U.S. Commerce Department data showed U.S. consumer spending appeared to have slowed further in January, with sales at clothing stores declining by the most since 2009, which could raise concerns about the economy's ability to continue its moderate expansion. Commerce said retail sales excluding automobiles, gasoline, building materials and food services were unchanged last month, weaker than the 0.3 percent rise economists had predicted in a Reuters poll. Data for December was revised down. Separately, U.S. industrial production fell 0.3% in January as unseasonably warm weather held down the output of utilities and Boeing Co cut production of civilian aircraft, the Federal Reserve said on Friday. In China, the capital city Beijing on Friday imposed a 14-day self-quarantine on people returning to the city from holidays to prevent the spread of the new coronavirus, as the country struggles to get its economy going after the annual Lunar New Year holiday. Authorities reported 5,090 new cases in mainland China, including more than 120 deaths, taking the number of infected to 63,851, and the number of deaths to 1,380. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 2 basis points at 1.4217% in afternoon trading. February 14 Friday 1:33PM New York / 1833 GMT Price Current Net Yield % Change (bps) Three-month bills 1.545 1.5766 -0.010 Six-month bills 1.515 1.5518 -0.008 Two-year note 99-233/256 1.4217 -0.020 Three-year note 99-246/256 1.3884 -0.030 Five-year note 99-218/256 1.4061 -0.034 Seven-year note 100 1.5 -0.038 10-year note 99-68/256 1.5797 -0.037 30-year bond 99-56/256 2.0349 -0.043 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 2.50 -0.50 spread U.S. 3-year dollar swap 1.25 -0.25 spread U.S. 5-year dollar swap -1.00 -0.75 spread U.S. 10-year dollar swap -6.00 -0.75 spread U.S. 30-year dollar swap -33.25 -0.50 spread (Reporting by Ross Kerber; Editing by David Gregorio)

TREASURIES-Yields decline on virus concerns and consumer data

14 Feb 2020

By Ross Kerber BOSTON, Feb 14 U.S. Treasury yields declined on Friday as investors bought safe-haven government debt ahead of a long holiday weekend after soft retail sales data and on continuing caution about the coronavirus epidemic in China. The benchmark 10-year yield was down 3 basis points in morning trading at 1.5866%. James Barnes, director of fixed income at Bryn Mawr Trust, cited concerns about the coronavirus in China and a report that core U.S. retail sales were unchanged for January. Traders also reduced risk in their portfolios heading into the weekend, wary of what news might emerge about the virus, similar to trading on previous Fridays. U.S. markets are closed on Monday for Presidents Day. "Traders are more comfortable going into the weekend" with less risk, he said, adding that many believe "There's more risk to the downside than to the upside." U.S. Commerce Department data showed U.S. consumer spending appeared to have slowed further in January, with sales at clothing stores declining by the most since 2009, which could raise concerns about the economy's ability to continue its moderate expansion. Commerce said retail sales excluding automobiles, gasoline, building materials and food services were unchanged last month, weaker than the 0.3 percent ries economists had predicted in a Reuters poll. Data for December was revised down. China's National Health Commission said it had recorded 121 new deaths and 5,090 new coronavirus cases on the mainland on Thursday, taking the total number of infected to 63,851. Some 55,748 people are being treated, while 1,380 have died of the virus. Policymakers pledged to do more to stimulate economies hit by the virus, helping Asian stock markets edge higher. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 2 basis points at 1.4217% in morning trading. February 14 Friday 9:21AM New York / 1421 GMT Price Current Net Yield % Change (bps) Three-month bills 1.545 1.5766 -0.010 Six-month bills 1.515 1.5518 -0.008 Two-year note 99-233/256 1.4217 -0.020 Three-year note 99-240/256 1.3964 -0.022 Five-year note 99-208/256 1.4143 -0.026 Seven-year note 99-244/256 1.5071 -0.031 10-year note 99-52/256 1.5866 -0.030 30-year bond 99-44/256 2.037 -0.041 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 2.50 -0.50 spread U.S. 3-year dollar swap 1.00 -0.50 spread U.S. 5-year dollar swap -0.75 -0.50 spread U.S. 10-year dollar swap -5.75 -0.50 spread U.S. 30-year dollar swap -32.75 0.00 spread (Reporting by Ross Kerber; Editing by David Gregorio)

TREASURIES-Yields tick down as traders balance virus, economic reports

13 Feb 2020

(Updates with market activity, 30-year auction results) By Ross Kerber BOSTON, Feb 13 U.S. Treasury yields were slightly lower on Thursday as traders balanced worsening news about the coronavirus epidemic in China with positive U.S. economic reports. The benchmark 10-year yield was down 1.8 basis points in afternoon trading at 1.6087%. A strong auction of 30-year bonds at 1 p.m. (1800 GMT) also showed continued demand. The trading was part of a broader reaction to a sharp rise in the number of coronavirus deaths and infections reported in China, which unnerved world markets on Thursday and interrupted the rally in stocks while boosting the prices of U.S. government bonds and gold, which are considered safe havens. But positive economic data, such as consumer prices, prevented yields from falling further, said Andrew Richman, director of fixed income strategies at SunTrust Advisory Services, as investors bet against an extreme economic impact from the epidemic. "The U.S. is certainly not in a recession, Europe isn't getting any worse, and that's balancing out this terrible news from China," Richman said. In the 1 p.m. action, the U.S. Treasury sold $19 billion worth of 30-year bonds at a high yield of 2.061%, a record low for such auctions. BMO Capital Markets analyst Ben Jeffery said the result showed how traders did not hesitate to buy up the bonds, in line with equally strong demand for shorter-dated auctions earlier this week. "The record low is really a testament to how monetary policy and growth expectations have shifted," he said. "The fact that interest rates are so low, and that there's still record demand, supports the argument there is going to continue to be a structural demand for Treasuries," he said. The eventual impact of the coronavirus remains to be seen. Experts, including several affiliated with the National Association for Business Economics, have emphasized the many unknowns that remain, such as the disease's incubation period and fatality rates. In Hubei province in central China, officials said 242 people died on Wednesday, the biggest daily rise since the flu-like virus emerged in the provincial capital Wuhan in December. Total deaths in China were reported at 1,367. The province recorded thousands more infections, but that appeared to be largely due to a new counting method. Separately, U.S. underlying consumer prices picked up in January as households paid more for rents and clothing, supporting the Federal Reserve's contention that inflation would gradually rise toward its 2% target. The Labor Department said on Thursday its consumer price index, excluding the volatile food and energy components, rose 0.2% last month after edging up 0.1% in December. The so-called core CPI was up by an unrounded 0.2423% last month. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down less than a basis point at 1.4377% in afternoon trading. February 13 Thursday 2:21PM New York / 1921 GMT Price Current Net Yield % Change (bps) Three-month bills 1.5525 1.5845 0.007 Six-month bills 1.5225 1.5598 0.003 Two-year note 99-225/256 1.4377 -0.004 Three-year note 99-230/256 1.4098 -0.008 Five-year note 99-184/256 1.4339 -0.011 Seven-year note 99-204/256 1.5308 -0.014 10-year note 99 1.6087 -0.018 30-year bond 106-224/256 2.0645 -0.027 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 3.00 -1.00 spread U.S. 3-year dollar swap 1.75 -0.75 spread U.S. 5-year dollar swap -0.25 -0.75 spread U.S. 10-year dollar swap -5.25 -0.25 spread U.S. 30-year dollar swap -32.50 -0.25 spread (Reporting by Ross Kerber in Boston; editing by Jonathan Oatis)

REFILE-TREASURIES-Yields tick down as traders balance virus, economic reports

13 Feb 2020

(Corrects typographical error in 7th paragraph to make it "thousands" instead of "thousand") By Ross Kerber BOSTON, Feb 13 U.S. Treasury yields were slightly lower on Thursday as traders balanced worsening news about the coronavirus epidemic in China with positive U.S. economic reports. The benchmark 10-year yield was down less than a basis point in morning trading at 1.619%. The trading was part of a broader reaction to a sharp rise in the number of coronavirus deaths and infections reported in China, which unnerved world markets on Thursday and halted the rally in stocks while boosting the prices of government bonds and gold. But positive economic data, such as consumer prices, prevented yields from falling further, said Andrew Richman, director of fixed income strategies at SunTrust Advisory Services, as investors bet against an extreme economic impact from the epidemic. "The U.S. is certainly not in a recession, Europe isn't getting any worse, and that's balancing out this terrible news from China," Richman said. As far as the epidemic's eventual economic impact, "nobody has their arms around this," he said. Richman's comments echoed the view of experts, including several affiliated with the National Association for Business Economics, who spoke on Tuesday and emphasized the many unknowns that remain, such as the disease's incubation period and fatality rates. In Hubei province in central China, officials said 242 people died on Wednesday, the biggest daily rise since the flu-like virus emerged in the provincial capital Wuhan in December. Total deaths in China were reported at 1,367. The province recorded thousands more infections, but that appeared to be largely due to a new counting method. Separately, U.S. underlying consumer prices picked up in January as households paid more for rents and clothing, supporting the Federal Reserve's contention that inflation would gradually rise toward its 2% target. The Labor Department said on Thursday its consumer price index, excluding the volatile food and energy components, rose 0.2% last month after edging up 0.1% in December. The so-called core CPI was up by an unrounded 0.2423% last month. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down a basis point at 1.4317% in morning trading. February 13 Thursday 9:29AM New York / 1429 GMT Price Current Net Yield % Change (bps) Three-month bills 1.5475 1.5794 0.002 Six-month bills 1.5175 1.5547 -0.002 Two-year note 99-228/256 1.4317 -0.010 Three-year note 99-232/256 1.4071 -0.011 Five-year note 99-182/256 1.4355 -0.010 Seven-year note 99-190/256 1.5392 -0.006 10-year note 98-232/256 1.619 -0.008 30-year bond 106-108/256 2.0842 -0.008 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 4.00 0.00 spread U.S. 3-year dollar swap 2.75 0.25 spread U.S. 5-year dollar swap 0.50 0.00 spread U.S. 10-year dollar swap -4.50 0.50 spread U.S. 30-year dollar swap -32.00 0.25 spread (Reporting by Ross Kerber in Boston; editing by Jonathan Oatis)

Das Coronavirus als Konjunkturkiller - "Jeder rät herum"

13 Feb 2020

Boston/Washington/Berlin Die Viruskrise in China trübt zusehends auch die Konjunkturaussichten ein.

TREASURIES-Yields higher as new coronavirus cases reportedly decline

12 Feb 2020

(Updates with market activity, results of 10-year auction) By Ross Kerber BOSTON, Feb 12 U.S. Treasury yields rose on Wednesday amid renewed risk tolerance after a reported drop in the number of new coronavirus cases in China alleviated some concerns about economic growth. The benchmark 10-year yield was up 4.8 basis points in afternoon trading at 1.6385%. Investors sold safe-haven bonds and bid up other assets, including U.S. stocks, also encouraged by the latest quarterly earning reports. "There seems to be better risk appetite," said John Briggs, head of strategy, Americas, at NatWest Markets. Wednesday's trading, he said, reflects "a removal of the flight-to-quality" seen in recent days. On Wednesday afternoon, the U.S. Treasury Department said it accepted $27 billion in bids for 10-year notes, out of $69.67 billion worth of bids tendered, at a median yield of 1.577%. Briggs said Treasury markets were likely not affected by comments from U.S. Federal Reserve chairman Jerome Powell, who on Wednesday reiterated his confidence in the sustainability of the record-long U.S. economic expansion. "There’s no reason why the current situation of low unemployment, rising wages, high job creation - there’s no reason why it can’t go on," Powell told the Senate Banking Committee in his second day of congressional testimony. China reported its lowest number of new coronavirus cases since January, lending weight to a prediction by its top medical adviser that the outbreak will end by April. However, it was still unclear to what extent economic growth would take a hit from the virus, which has killed more than 1,100 people, shuttered businesses in China and briefly disrupted a global stock market rally in the past weeks. In Washington, U.S. Treasury Secretary Steven Mnuchin said that the negative economic impact from the coronavirus outbreak is a one-time event that will not last beyond 2020. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.9 basis points at 1.4458 % in afternoon trading. February 12 Wednesday 4:50PM New York / 2150 GMT Price Current Net Yield % Change (bps) Three-month bills 1.545 1.5769 -0.002 Six-month bills 1.515 1.5521 0.002 Two-year note 99-221/256 1.4458 0.029 Three-year note 99-220/256 1.4232 0.032 Five-year note 99-158/256 1.4552 0.046 Seven-year note 99-160/256 1.557 0.048 10-year note 101 1.6385 0.048 30-year bond 106-40/256 2.0958 0.044 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 4.25 1.25 spread U.S. 3-year dollar swap 2.50 2.00 spread U.S. 5-year dollar swap 0.50 1.25 spread U.S. 10-year dollar swap -4.75 1.25 spread U.S. 30-year dollar swap -31.75 1.75 spread (Reporting by Ross Kerber; Editing by Chizu Nomiyama and Alistair Bell)

TREASURIES-Yields higher as new coronavirus cases reportedly decline

12 Feb 2020

(Updates with market activity, Mnuchin comments) By Ross Kerber BOSTON, Feb 12 U.S. Treasury yields rose on Wednesday amid renewed risk tolerance after a reported drop in the number of new coronavirus cases in China alleviated some concerns about economic growth. The benchmark 10-year yield was up 4 basis points in afternoon trading at 1.6299%. Investors sold safe-haven bonds and bid up other assets, including U.S. stocks, also encouraged by the latest quarterly earning reports. "There seems to be better risk appetite," said John Briggs, head of strategy, Americas, at NatWest Markets. Wednesday's trading, he said, reflects "a removal of the flight-to-quality" seen in recent days. Briggs said Treasury markets were likely not affected by comments from U.S. Federal Reserve chairman Jerome Powell, who on Wednesday reiterated his confidence in the sustainability of the record-long U.S. economic expansion. "There’s no reason why the current situation of low unemployment, rising wages, high job creation - there’s no reason why it can’t go on," Powell told the Senate Banking Committee in his second day of congressional testimony. China on Wednesday reported its lowest number of new coronavirus cases since January, lending weight to a prediction by its top medical adviser that the outbreak will end by April. However, it was still unclear to what extent economic growth would take a hit from the virus, which has killed more than 1,100 people, shuttered businesses in China and briefly disrupted a global stock market rally in the past weeks. Also in Washington on Wednesday, U.S. Treasury Secretary Steven Mnuchin said that the negative economic impact from the coronavirus outbreak is a one-time event that will not last beyond 2020. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.5 basis points at 1.4417 % in afternoon trading. February 12 Wednesday 2:47PM New York / 1947 GMT Price Current Net Yield % Change (bps) Three-month bills 1.545 1.5769 -0.002 Six-month bills 1.52 1.5573 0.007 Two-year note 99-223/256 1.4417 0.025 Three-year note 99-224/256 1.4178 0.027 Five-year note 99-170/256 1.4453 0.036 Seven-year note 99-180/256 1.5451 0.036 10-year note 101-20/256 1.6299 0.040 30-year bond 106-80/256 2.089 0.037 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 4.00 1.00 spread U.S. 3-year dollar swap 2.25 1.75 spread U.S. 5-year dollar swap 0.50 1.25 spread U.S. 10-year dollar swap -5.00 1.00 spread U.S. 30-year dollar swap -32.25 1.25 spread (Reporting by Ross Kerber; editing by Jonathan Oatis and Chizu Nomiyama)

TREASURIES-Yields higher as new coronavirus cases reportedly decline

12 Feb 2020

By Ross Kerber BOSTON, Feb 12 U.S. Treasury yields rose on Wednesday as investors showed a renewed appetite for risk following a reported drop in the number of new coronavirus cases in China. The benchmark 10-year yield was up 3.8 basis points in midday trading at 1.6282%. Investors moving away from bonds who bid up other assets, including U.S. stocks, were also encouraged by the latest quarterly earning reports. "There seems to be better risk appetite," said John Briggs, head of strategy, Americas, at NatWest Markets. Wednesday's trading, he said, reflects "a removal of the flight-to-quality" seen in recent days. Briggs said Treasury markets were likely not affected by comments from U.S. Federal Reserve chairman Jerome Powell, who on Wednesday reiterated his confidence in the sustainability of the record-long U.S. economic expansion. "There’s no reason why the current situation of low unemployment, rising wages, high job creation - there’s no reason why it can’t go on," Powell told the Senate Banking Committee in his second day of congressional testimony. China on Wednesday reported its lowest number of new coronavirus cases since January, lending weight to a prediction by its top medical adviser that the outbreak will end by April. However, it was still unclear to what extent economic growth would take a hit from the virus, which has killed more than 1,100 people, shuttered businesses in China and briefly disputed global stock market rally in the past weeks. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.3 basis points at 1.4397% in midday trading. February 12 Wednesday 12:37PM New York / 1737 GMT Price Current Net Yield % Change (bps) Three-month bills 1.545 1.5769 -0.002 Six-month bills 1.52 1.5573 0.007 Two-year note 99-224/256 1.4397 0.023 Three-year note 99-224/256 1.4178 0.027 Five-year note 99-172/256 1.4437 0.035 Seven-year note 99-180/256 1.5451 0.036 10-year note 101-24/256 1.6282 0.038 30-year bond 106-80/256 2.089 0.037 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 4.25 1.25 spread U.S. 3-year dollar swap 2.50 2.00 spread U.S. 5-year dollar swap 0.50 1.25 spread U.S. 10-year dollar swap -4.75 1.25 spread U.S. 30-year dollar swap -32.50 1.00 spread (Reporting by Ross Kerber; editing by Jonathan Oatis)

Shareholder activists test JPMorgan's Dimon on climate proposals

12 Feb 2020

BOSTON/NEW YORK Shareholder activists focused on climate issues vowed to press proxy battles with JPMorgan Chase & Co after getting a cold reception from the top Wall Street bank, even though Chief Executive Jamie Dimon has vowed to protect the environment.

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