FURTHER FURTHER READING
- China RMB internationalisation debate hosted by Euromoney.
- The power behind the throne at the Federal Reserve.
- A further breakdown of the GDP numbers.
- The household economics of 3-D printers.
- Barnejek on central banks' credibility.
- Brad DeLong posts the text to a Larry Summers paper on monetary policy from 1991.
ROUND-UP
FT markets round-up: "US Treasury bonds rallied and the dollar came under pressure after the Federal Reserve maintained its policy stance following a meeting of its rate-setting Open Market Committee. The Fed said it would continue to buy $85bn of Treasury and mortgage securities each month "until the outlook for the labour market has improved substantially". The 10-year US government bond yield swung from being up around 8 basis points, before the release of the statement, to standing 2bp lower at 2.59 per cent by the close of New York trade. The dollar gave back early gains against the yen and the euro, with the dollar index – a measure of its value against a basket of currencies – down 0.3 per cent. And gold saw choppy trading, sliding to within striking distance of the $1,300 level before pulling back to finish just $3 lower at $1,323. US equities initially extended early gains, with the S&P 500 touching 1,698 – within a whisker of its record intraday high – but then ran out of steam and closed a fraction lower." (Financial Times)
Latin American countries rail against IMF over Greek bailout: "Brazil's representative to the International Monetary Fund's executive board abstained from approving the fund's new €1.8bn contribution to Greece this week and issued a stinging criticism, arguing that Athens might be unable to repay its rescue loans. Paulo Nogueira Batista, who represents 11 Central and South American countries on the IMF board, said Greece's political and economic difficulties "confirm some of our worst fears", adding the fund's own economists were making "over-optimistic" assumptions about economic growth and the sustainability of its debt." (Financial Times)
Herbalife boosted by reports of Soros stake: "Herbalife shares jumped to a fresh 12-month high on Wednesday following reports that billionaire investor George Soros had taken a large stake in the nutritional supplement direct seller. A 9 per cent rise in the share price to more than $65 extends losses already in the hundreds of millions of dollars for Pershing Square, the $13bn hedge fund run by Bill Ackman, that has called Herbalife a fraudulent pyramid scheme and placed a billion-dollar bet against the value of its shares." (Financial Times)
Goldman relents in metals warehousing row: "Goldman Sachs has bowed to a barrage of criticism of its activities in the metals markets, proposing a series of measures to ease long queues that have helped to boost profits at its warehousing unit. The bank came under heavy fire last week at a Senate hearing on banks and commodity markets where MillerCoors, the brewer, suggested that its supply chain had been hampered by long queues to take delivery of the metal from warehouses owned by Goldman and other banks and traders." (Financial Times)
US Treasury announces cut in debt sales: "Bond traders will underwrite less government debt in the coming quarter for the first time since 2010 after the US Treasury said it would cut debt sales – reflecting its plans to introduce floating rate notes next year and an improving federal budget deficit. Cuts in Treasury debt sales for so-called coupon issues would start in the coming quarter and involve the two-year and three-year note maturities, said the US Treasury on Wednesday." (Financial Times)
Goldman bets on eurozone recovery: "Goldman Sachs Asset Management has significantly increased its exposure to European equities in anticipation of an end to the recession in Europe. The US investment house had been overweight European equities by 4 per cent compared with the MSCI All Country World index for several months, but it recently doubled its overweight position to over 8 per cent." (Financial Times)
