2000-03-16 Markets ignore PPI
Daily Brady Bond Trading Commentary
Thursday March 16, 2000
The US bond markets shrugged off what appeared to be relatively hostile Producer Price Index figure of 1.0 per cent which was well ahead of a consensus forecast of 0.6 per cent.
Taking into account both food and energy, however, the number was in line with estimates. Optimists continue to hope for falling petroleum prices although it is worth noting that budgets in Ecuador, Mexico and Venezuela were all written at substantially lower crude prices than those presently posted so all there three countries can weather falling petroleum prices without strain on economic projections. Both housing starts and initial jobless claims caused no surprises but the Philadelphia Fed came in much stronger than forecast at 25.0 against a predicted 13.3.
We believe that these figures have taken any further guesswork out of the FOMC Meeting and that the only debate is now going to center around the size of the tightening with odds favoring 25bps. Industrial production figures in Argentina, Brazil and Mexico continue to show a very positive trend and this should prompt investors to review the asset class for further opportunities.
Contributed by
Credit Lyonnais Securities (USA) Inc.
This report was prepared by Credit Lyonnais Securities (USA) Inc. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. Returns set forth in this report are estimates based on internal assumptions, and any changes in these assumptions may have material impact on such estimated returns. This is not a solicitation or any offer to buy or sell securities. We, our affiliates, and any officer, director or stockholder or any member of their families, may have a position in and may from time to time purchase or sell any of the above mentioned or related securities.