Daily Digest

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Daily Digest 7/6 - Brazil Exports Drop, Bad Debt Piled in Italian Banks Looms as Next Crisis

Wednesday, July 6, 2016, 9:23 AM


Selling bonds may help U.S. pensions: Bank of America Merrill Lynch

The average funded ratios of the top 100 U.S. corporate pensions are expected to fall to the lows seen in 2012 as the U.S. 30-year yield has fallen half a percentage point and yield premiums on corporate bonds also have declined since April, according to Bank of America analysts.

Canada Post lockout: work stoppages and unsustainable pension plans need to end

CFIB issued a letter to Canada Post president and CEO Deepak Chopra last week, calling for a settlement, but stressing that unfunded liabilities in Canada Post's pension plan are not a trivial issue, with a $6.2 billion solvency deficit. Pension costs must to be lowered to ensure plans are sustainable and don't force rate hikes or service cuts on customers.

Russia to empty one of its sovereign funds next year - ministry proposal

The National Wealth Fund, which at the start of July contained $73 billion, is not intended for covering budget shortfalls. It was originally intended to pay for future pensions but a portion of the fund has been committed to investment projects.

U.K. Pension Fund Deficit Likely to Hit Record as Brexit Turmoil Squashes Bond Yields

The latest official data from the Pension Protection Fund showed a deficit of £295 billion ($392 billion) for the PPF 7800 — an index of thousands of defined benefit pension schemes — at the end of May. That deficit likely widened to around £388 billion by the end of June, according to analysts at Morgan Stanley, based on the changes in yields and share prices.

Senate votes to slash minimum wage for youth in Puerto Rico

Holding their noses and faced with a July 1 deadline, senators voted on June 29 for a Puerto Rico fiscal rescue bill that cuts the island commonwealth's minimum wage for young workers, by $3 an hour, to $4.25, endangers overtime pay and imperils union contracts there, the measure's foes say.

High-interest consumer lending jumps in Golden State

Some of these financial products charge annual interest rates ranging from 30 to 180 percent. Firms licensed under the California Finance Lenders Law loaned a total of $34.1 billion in 2015, up 48.7 percent from the previous year, according to the report.

Brexit Accelerates the British Pound’s 100 Years of Debasement

The world’s oldest currency -- sterling is derived from the old German “ster” for strong or stable -- bought almost $5 during World War I. The day of the EU referendum, it traded at $1.50. It touched a 31-year low of $1.3115 on Tuesday.

Brazil New Vehicle Sales Fall 25.4% in First Half Amid Poor Economy

New vehicle sales in Brazil plunged in the first half of the year, as the country's economic recession persisted in the period, hurting consumer confidence.

Yield Curve Shows 60% Chance of Recession, Deutsche Bank Says

The so-called yield curve suggests there’s a 60% chance of a U.S. recession occurring in the next 12 months, according to analysts at Deutsche Bank, led by Dominic Konstam. The calculations attach the highest probability to an economic contraction since the financial crisis.

Exports to Brazil drop 24% in 6 months

The impact of the deep recession in neighbouring Brazil on Argentine businesses has been fully exposed — data from a consultancy firm revealed yesterday that exports by the local industrial sector to Latin America’s biggest economy have slumped by a staggering 24 percent over the last six months.

Second Property Fund Suspends Trades Over Brexit Fears

Aviva Investors suspended trading in a 1.8 billion-pound ($2.4 billion) real estate investment fund, after Standard Life Investments froze its fund Monday, as investors demanded their money back in the wake of Britain’s vote to leave the European Union.

Government Bond Yields in U.S., Europe Hit Historic Lows

Benchmark 10-year government debt yields from the U.S., Germany, Switzerland, France, Denmark and Sweden all fell to fresh historic lows on Tuesday as persistent uncertainty surrounding the economic and political fallout from the U.K.’s vote to quit the European Union continues to boost demand for haven assets.

Benchmark U.S. yields hit record lows on global uncertainty

U.S. 10-year Treasury notes were last up 21/32 in price to yield 1.389 percent after touching a record low of 1.377 percent at 5:39 a.m. ET (0939 GMT), while 30-year bonds were last up 2-2/32 in price to yield 2.157 percent after touching a yield of 2.141 percent at 5:39 a.m. ET. That was the lowest yield on 30-year bonds since the 1950s, Bank of America Merrill Lynch data showed.

Italian banks under pressure as political crisis looms

Banks in Italy are weighed by about €360 billion in nonperforming loans, or unpaid debts, according to Italy’s central bank. That represents 18.1% of total loans to consumers. Roughly €210 billion of those loans have been taken out by borrowers now considered to be insolvent.

Bad Debt Piled in Italian Banks Looms as Next Crisis

In Italy, 17% of banks’ loans are sour. That is nearly 10 times the level in the U.S., where, even at the worst of the 2008-09 financial crisis, it was only 5%. Among publicly traded banks in the eurozone, Italian lenders account for nearly half of total bad loans.E

Italian Bank Risk Surges as Capital Needs Fuel Bail-In Concerns

Italy is talking with European Union authorities to get approval to provide capital to Monte Paschi, its third largest bank, a person with knowledge of the plan said on Tuesday. Failing unanimous approval by EU member states to waive rules designed to protect taxpayers, any injection of public funds would require shareholders and junior creditors to take losses.

FTSE turns higher after new Bank of England stimulus

Britain's top shares index rose on Tuesday, lifted by new measures from the Bank of England to prop up the economy in the wake of the country's vote to leave the European Union.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/5/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."


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Minutes show more vocal doves at the Fed

Minutes show more vocal doves at the Fed

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Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4238
Japan Needs Fiscal Stimulus to End Deflation, Abe Adviser Says


Japan Needs Fiscal Stimulus to End Deflation, Abe Adviser Says

Bloomberg-14 hours ago
Fujii praised the Bank of Japan's negative interest rate policy introduced in January as strongly pushing investment, and added that if government policy makers ...

Fed's Urgency to Hike Fades Away as Jobs and Brexit Dim Outlook

Bloomberg-18 hours ago

... said uncertainty around China's foreign-exchange rate policy, and high debt ... stock market selloff and fueled more than $144 billion of capital outflows from .

Central Banks Put Squeeze on Sovereign-Debt Market

Wall Street Journal - ‎15 hours ago‎
Christopher Sullivan, a money manager in New York, is worried that when he needs U.S. Treasury bonds one day, he might not be able to get them. On the surface, the concern might seem unwarranted: The U.S. Treasury has $13.4 trillion in debt securities ...

Nearly a third of euro zone government bonds now not eligible for ECB to buy

CNBC - ‎4 hours ago‎
LONDON, July 7 (Reuters) - Nearly a third of euro zone government bonds are no longer eligible for the European Central Bank's quantitative easing scheme, piling pressure on the central bank to revamp its stimulus programme. The global collapse in bond ...

ECB Minutes Show Concerns Over Brexit Spillover in Eurozone

Wall Street Journal - ‎3 hours ago‎
They stressed that they stood ready to provide more stimulus if inflation continued to miss their near-2% target. Eurozone inflation has hovered around zero for two years even as the ECB launched a massive bond-purchase program and cut interest rates ...

Bond market is in an 'epic bubble of colossal proportions,' says ...

CNBC-4 hours ago
In Europe, concern for Italy's economy continues to rise as that nation struggles to maintain negative interest rates while simultaneously raising capital for its ...

Rio Olympic Cost Overruns Reach $1.6 Billion: Oxford Study

Bloomberg-14 hours ago
The central bank has since sought to better explain its intentions to investors. ... the central bank sets its daily fixings, which restrict the onshore yuan's moves to ...

Brazil sees 2017 fiscal gap of up to 160 billion reais : lawmakers

Reuters-14 hours ago
... budget deficit, or the public sector's shortfall before interest debt payments. ... They are trying to reach something between 150 and 160 billion reais, which will ...

Sovereigns Face Record Year for Downgrades

Wall Street Journal-2 hours ago
... been coming down in emerging markets, suggesting investors are knuckling down for a sustained period of low growth and potential central bank stimulus.

Gold Assets Top 2000 Tons as the Clamor for Havens Grows Louder

Bloomberg-12 hours ago
... before Britain's vote. In Europe, there's speculation policy makers may add to stimulus, as well as rising concern about weakness in Italy's banking industry.

Populist Politicians Take On Italy's Massive Debt Pile

Bloomberg - ‎10 hours ago‎
The courts are grappling with hundreds of lawsuits over unpaid debts going back 50 years for land expropriated to build hospitals, streets, and other city projects—including some debts connected to the 1960 games, former Mayor Ignazio Marino has said ...

Copper's $149 Billion Mine Pipeline Stalls as Deficit Nears

Bloomberg-19 hours ago
The $149 billion pipeline to expand the world's copper supply is running into ... Chile's state-owned Codelco, the top producer, is predicting a deficit by 2018, ...

US corporate pension funding gap grows in June, BNY Mellon says

Yahoo Finance-58 minutes ago
The S&P 500 pension deficit was estimated to have risen by $61 billion last month to ... historic lows, driving up the levels of pension liabilities, BNY Mellon said.

Blue Cross plans Medigap rate hikes on seniors, up to $315 per month

Detroit Free Press-18 hours ago

Going forward, Blue Cross expects its Medigap rates to adjust every year — as health care costs and insurance rates always do. While the new rates take into ..

German Output in May Unexpectedly Drops in Sign of Slowdown

Bloomberg-8 hours ago

German industrial production dropped the most in 21 months in May in a sign that the headwinds from a global economic slowdown and political uncertainty in ..

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