Morning 9-20

News:

  • A bit of Positive sentiment regarding U.S China trade   negotiations as Some members of Chinese delegation will stay in U.S. and visit farming regions
  • PBOC lowered a one year lending  rate by .05%
  • The BOJ  made sweeping changes to bond purchases, the lowered buying across three maturities zones by $463 in hope of steeping the  Curve (BBG)
  • Japan CPI Core Cpi touched 2 year low
  • The Fed will again step into the repo market to provide liquidity. Yesterday that was a positive for bonds as some thought QE announcement sooner rather than later, today bonds a bit heavy
  • Oil market still nervous especially on A Friday with weekend ahead, CL +1% Brent +.7% Kuwait has raised her security levels, Saudi Arabia has targeted a handful of Houthi sites.
  • The Bloomberg  Economic Surprise Index reached an 11 month high, The higher the reading the more positive surprises in  economic data have been “Things getting better” BBG
  • The latest round of Short term loans from ECB fizzled as Demand was  well below expectations
  • Three Fed speakers today Fed Gov/Vice Chair/voter Clarida (10:00 ET), NY Fed President/voter/enigma Williams (08:15 ET), Boston Fed President/voter/dissenter Rosengren (11:20 ET), Dallas Fed President/voter 2020 Kaplan (13:00ET)
  • Prolonged Funding Stress Boosts Calls for Permanent Fed Fix- The New York Fed said Thursday that it will once again do a $75 billion overnight repo operation on Friday….Swaps are signaling less appetite for Treasuries, driven by concern traders won’t be able to fund purchases of U.S. debt through the repo market….Wall Street bond dealers submitted about $84 billion of securities for Thursday’s Fed action, the most in the three days.https://www.bloomberg.com/news/articles/2019-09-18/fed-plans-to-intervene-in-repo-market-for-a-third-straight-day

Fed Will Weigh Resuming Balance Sheet Growth at October Meeting– Decision to add new Treasuries wouldn’t represent a resumption of crisis-era quantitative easing stimulus

Markets:

 Stocks steady to higher Bunds and treasuries a bit lower, Dollar is firm. All eyes on Fed speak and of Course and tweets from trump Economic Calendar empty today.

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