The risk of European companies defaulting on their debt fell for a fourth day on speculation the Federal Reserve will cut benchmark lending rates next month, according to traders of credit-default swaps.
Contracts on the Markit iTraxx Crossover Index of 50 European companies with mostly high-risk, high-yield credit ratings dropped 5 basis points to 361 basis points, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, falls when perceptions of credit quality improve.
Fed Vice Chairman Donald Kohn said yesterday that market ``turbulence'' sparked by the U.S. housing recession may reduce credit to businesses and consumers, reinforcing investors' expectations policymakers will cut rates again when they meet Dec. 11. Federal funds futures indicate a 100 percent probability of a reduction by a quarter point to 4.25 percent.
``The Fed might be forced not only to a couple of rate cuts, but to move toward a full rate-cut cycle,'' said Philip Gisdakis, a credit strategist at UniCredit SpA in Munich. ``Every piece of bad news is seen as good news for credit as it would force the Fed to lower rates.''
smallcap-review.com
четверг, 29 ноября 2007 г.
European Bonds Advance; 10-Year Yield Falls to 4.10 Percent
European government bonds advanced, snapping two days of declines.
The yield on the 10-year bund, Europe's benchmark, fell 2 basis points to 4.10 percent by 10:15 a.m. in London.
The price of the 4.25 percent security due July 2017 rose 0.13, or 1.3 euros per 1,000-euro ($1,465) face amount, to 101.17.
The yield on the two-year note fell 2 basis points to 3.77 percent.
smallcap-review.com
The yield on the 10-year bund, Europe's benchmark, fell 2 basis points to 4.10 percent by 10:15 a.m. in London.
The price of the 4.25 percent security due July 2017 rose 0.13, or 1.3 euros per 1,000-euro ($1,465) face amount, to 101.17.
The yield on the two-year note fell 2 basis points to 3.77 percent.
smallcap-review.com
пятница, 23 ноября 2007 г.
European Bonds Poised for Weekly Gain as Investors Flee Stocks
European government notes are poised for the biggest weekly gain in three months as ongoing concern about widening credit market losses, record oil prices and the weaker dollar stoked demand for the safest assets.
Two-year note yields are at a 13-month low after Asian equities this week slipped to a two-month low and slumping U.S. stocks wiped out this year's gain for the Standard & Poor's 500 Index. Losses from U.S. subprime mortgage foreclosures, coupled with slowing economic expansion and falling house prices, could reach $300 billion, the OECD said yesterday.
``Bonds aren't being driven by fundamentals, but by fear and uncertainty on the impact of the subprime mortgage market,'' said Nick Stamenkovic, a strategist at RIA Capital Markets in Edinburgh. ``People will continue to move into bonds at the expense of equities particularly when there are funding problems in the run-up to the year-end.''
The yield on the two-year German note fell 4 basis points to 3.57 percent by 8:15 a.m. in London, leaving it 23 points lower in the week. The yield on the 10-year bund, Europe's benchmark, has dropped 12 basis points since Nov. 16.
The price of the 4 percent security due September 2009 rose 0.07, or 70 euro cents per 1,000-euro ($1,492) face amount, to 100.73 today. Yields move inversely to bond prices.
European bonds held gains after a report showed German import prices, an early indicator of inflation pressures in the euro region's largest economy, increased the most in almost a year in October, led by a surge in oil prices.
milliondollarstrade.com
Two-year note yields are at a 13-month low after Asian equities this week slipped to a two-month low and slumping U.S. stocks wiped out this year's gain for the Standard & Poor's 500 Index. Losses from U.S. subprime mortgage foreclosures, coupled with slowing economic expansion and falling house prices, could reach $300 billion, the OECD said yesterday.
``Bonds aren't being driven by fundamentals, but by fear and uncertainty on the impact of the subprime mortgage market,'' said Nick Stamenkovic, a strategist at RIA Capital Markets in Edinburgh. ``People will continue to move into bonds at the expense of equities particularly when there are funding problems in the run-up to the year-end.''
The yield on the two-year German note fell 4 basis points to 3.57 percent by 8:15 a.m. in London, leaving it 23 points lower in the week. The yield on the 10-year bund, Europe's benchmark, has dropped 12 basis points since Nov. 16.
The price of the 4 percent security due September 2009 rose 0.07, or 70 euro cents per 1,000-euro ($1,492) face amount, to 100.73 today. Yields move inversely to bond prices.
European bonds held gains after a report showed German import prices, an early indicator of inflation pressures in the euro region's largest economy, increased the most in almost a year in October, led by a surge in oil prices.
milliondollarstrade.com
Smaller Companies Grab Bigger Share of Surging U.S. Exports
Smaller companies are grabbing a bigger share of U.S. exports, making up for some of the jobs lost as multinational firms move operations overseas.
American businesses without international subsidiaries accounted for 46 percent of sales abroad in 2005, up from 38 percent in 1999, according to a Commerce Department analysis published last week. The trend is likely to continue, helping cushion the economy from the worst housing recession in 16 years, economists said.
``We are at a six-month backlog now and we have been for over a year,'' said Leon Trammel, chairman of Tramco Inc., a Wichita, Kansas-based maker of conveyor belts. ``Our business is just great.''
After exporting his first belt to the Netherlands on an impulse 35 years ago, foreign sales will be almost half of his firm's projected $40 million in sales this year, Trammel said.
Faster global communications and fewer trade barriers have enabled businesses like Tramco, with few or no factories overseas, to take advantage of the strongest global economy in almost three decades. Private companies with less than 500 employees account for all the jobs created since 2005, according to figures from ADP Employer Services.
``It's a very important element driving the economy,'' said John Murphy, vice president of Latin American Affairs for the U.S. Chamber of Commerce, said in an interview. ``For small companies, exporting is the only way for them to tap into foreign markets.''
milliondollarstrade.com
American businesses without international subsidiaries accounted for 46 percent of sales abroad in 2005, up from 38 percent in 1999, according to a Commerce Department analysis published last week. The trend is likely to continue, helping cushion the economy from the worst housing recession in 16 years, economists said.
``We are at a six-month backlog now and we have been for over a year,'' said Leon Trammel, chairman of Tramco Inc., a Wichita, Kansas-based maker of conveyor belts. ``Our business is just great.''
After exporting his first belt to the Netherlands on an impulse 35 years ago, foreign sales will be almost half of his firm's projected $40 million in sales this year, Trammel said.
Faster global communications and fewer trade barriers have enabled businesses like Tramco, with few or no factories overseas, to take advantage of the strongest global economy in almost three decades. Private companies with less than 500 employees account for all the jobs created since 2005, according to figures from ADP Employer Services.
``It's a very important element driving the economy,'' said John Murphy, vice president of Latin American Affairs for the U.S. Chamber of Commerce, said in an interview. ``For small companies, exporting is the only way for them to tap into foreign markets.''
milliondollarstrade.com
среда, 21 ноября 2007 г.
BP Blast Victims Seek $2 Billion, Attack `Lenient' Plea Deal
Victims of BP Plc's 2005 Texas refinery blast are seeking $2 billion after attacking a U.S. plea deal as ``shockingly lenient'' and successfully urging recusal of the judge in the case on claims of a conflict of interest.
The victims' lawyer said he will ask a new judge for the award on claims related to the blast instead of the $50 million provided for under the plea bargain. He argued in court papers filed in Houston yesterday that U.S. District Judge Gray Miller should remove himself since he worked for BP's law firm at the time of the explosion that killed 15 workers. Miller stepped aside a few hours later.
``BP has a prior history of terrible misconduct, and that ought to form the basis'' for increasing the fine to the federal maximum of twice the criminal proceeds, victims' lawyer David Perry said in an interview. The victims claim BP earned $1 billion from the plant in the 14 months before the blast.
BP agreed last month to plead guilty to exposing workers to toxic emissions during the Texas City explosion, trying to corner the propane-trading market and spilling 200,000 gallons of oil from corroded Alaskan pipelines. The plea bargain, with combined fines of $373 million, would end BP's federal criminal liability from the blast and the spills.
$50 Million
The $50 million portion of the fine related to the explosion allows BP, Europe's second-largest oil company, to retain profits made by running the plant without necessary safety improvements, workers said in their victim impact statement, filed in Houston federal court. Miller, who was to accept BP's plea Nov. 27, worked for Houston-based Fulbright & Jaworski before being appointed to the bench by U.S. President George W. Bush in 2006.
``The plea agreement proposed by the government and the defendant BP Products North America Inc. should be rejected as shockingly lenient and providing preferential treatment to BP,'' the workers said. The fine amount ``allows BP to retain more than 95 percent of the profit from its criminal conduct.''
The workers' complaint was submitted under a federal law that allows crime victims to file objections before sentencing. BP spokesman Neil Chapman declined to comment.
The explosion, which injured hundreds, occurred March 23, 2005, when an octane-boosting unit overflowed as it was being restarted following repairs. Gasoline vapors spewed into an inadequate vent system, igniting a blast that destroyed windows five miles away.
milliondollarsfinance.com
The victims' lawyer said he will ask a new judge for the award on claims related to the blast instead of the $50 million provided for under the plea bargain. He argued in court papers filed in Houston yesterday that U.S. District Judge Gray Miller should remove himself since he worked for BP's law firm at the time of the explosion that killed 15 workers. Miller stepped aside a few hours later.
``BP has a prior history of terrible misconduct, and that ought to form the basis'' for increasing the fine to the federal maximum of twice the criminal proceeds, victims' lawyer David Perry said in an interview. The victims claim BP earned $1 billion from the plant in the 14 months before the blast.
BP agreed last month to plead guilty to exposing workers to toxic emissions during the Texas City explosion, trying to corner the propane-trading market and spilling 200,000 gallons of oil from corroded Alaskan pipelines. The plea bargain, with combined fines of $373 million, would end BP's federal criminal liability from the blast and the spills.
$50 Million
The $50 million portion of the fine related to the explosion allows BP, Europe's second-largest oil company, to retain profits made by running the plant without necessary safety improvements, workers said in their victim impact statement, filed in Houston federal court. Miller, who was to accept BP's plea Nov. 27, worked for Houston-based Fulbright & Jaworski before being appointed to the bench by U.S. President George W. Bush in 2006.
``The plea agreement proposed by the government and the defendant BP Products North America Inc. should be rejected as shockingly lenient and providing preferential treatment to BP,'' the workers said. The fine amount ``allows BP to retain more than 95 percent of the profit from its criminal conduct.''
The workers' complaint was submitted under a federal law that allows crime victims to file objections before sentencing. BP spokesman Neil Chapman declined to comment.
The explosion, which injured hundreds, occurred March 23, 2005, when an octane-boosting unit overflowed as it was being restarted following repairs. Gasoline vapors spewed into an inadequate vent system, igniting a blast that destroyed windows five miles away.
milliondollarsfinance.com
Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show
The risk of owning European corporate bonds rose, according to traders of credit-default swaps.
Contracts on the iTraxx Crossover Series 8 Index of 50 European companies with mainly high-risk, high-yield credit ratings increased 5 basis points to 396 basis points today, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, rises when perceptions of credit quality deteriorate.
Contracts on the iTraxx Europe Index of 125 companies with investment-grade debt rose 1.5 basis points to 59 basis points, Deutsche Bank prices show.
A basis point on a credit-default swap contract protecting 10 million euros ($14.8 million) of debt for five years is equivalent to 1,000 euros a year.
Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
milliondollarsfinance.com
Contracts on the iTraxx Crossover Series 8 Index of 50 European companies with mainly high-risk, high-yield credit ratings increased 5 basis points to 396 basis points today, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, rises when perceptions of credit quality deteriorate.
Contracts on the iTraxx Europe Index of 125 companies with investment-grade debt rose 1.5 basis points to 59 basis points, Deutsche Bank prices show.
A basis point on a credit-default swap contract protecting 10 million euros ($14.8 million) of debt for five years is equivalent to 1,000 euros a year.
Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
milliondollarsfinance.com
понедельник, 19 ноября 2007 г.
Swiss Re Has $1.07 Billion Credit-Default Swaps Loss
Swiss Reinsurance Co., the world's biggest reinsurer, had a 1.2 billion-Swiss franc ($1.07 billion) loss on derivatives in October after the U.S. subprime mortgage crash roiled debt markets.
Swiss Re fell the most in almost 4-1/2 years in Zurich trading after the loss, which amounts to 981 million francs after tax. Losses occurred on two credit-default swaps Swiss Re sold to protect clients against declines in mostly mortgage-related investments, the Zurich-based company said today.
``We clearly made some poor choices,'' Roger Ferguson, the former U.S. Federal Reserve governor who runs Swiss Re's financial services division, told analysts on a conference call. Swiss Re's loss came less than two weeks after the company reported third-quarter profit that surpassed analysts' estimates.
``This is a surprise, particularly given their so recent reporting,'' said Richard Hewitt, an analyst at Dresdner Kleinwort who rates Swiss Re ``buy.''
Swiss Re shares fell as much as 6.9 percent, the biggest drop since June 2003, and were down 6.30 francs to 91.25 francs by 11:48 a.m. The stock has fallen 12 percent this year, matching the slump in the 28-member Bloomberg Europe 500 Insurance Index.
investanalyticsarticles.com
Swiss Re fell the most in almost 4-1/2 years in Zurich trading after the loss, which amounts to 981 million francs after tax. Losses occurred on two credit-default swaps Swiss Re sold to protect clients against declines in mostly mortgage-related investments, the Zurich-based company said today.
``We clearly made some poor choices,'' Roger Ferguson, the former U.S. Federal Reserve governor who runs Swiss Re's financial services division, told analysts on a conference call. Swiss Re's loss came less than two weeks after the company reported third-quarter profit that surpassed analysts' estimates.
``This is a surprise, particularly given their so recent reporting,'' said Richard Hewitt, an analyst at Dresdner Kleinwort who rates Swiss Re ``buy.''
Swiss Re shares fell as much as 6.9 percent, the biggest drop since June 2003, and were down 6.30 francs to 91.25 francs by 11:48 a.m. The stock has fallen 12 percent this year, matching the slump in the 28-member Bloomberg Europe 500 Insurance Index.
investanalyticsarticles.com
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