China’s central bank is said to see benchmark rate cut as the last resort

China’s central bank is not yet ready to cut benchmark interest rates to spur the slowing economy, despite cooling inflation and a stronger yuan, which have fanned market expectations of such a move, policy sources told Reuters. But the People’s Bank of China (PBOC) is likely to cut market-based rates and further lower banks’ reserve ratios (RRR) to boost credit growth and reduce firms’ borrowing costs, according to the sources involved in internal policy discussions. “We cannot rule out a (benc


China’s central bank is not yet ready to cut benchmark interest rates to spur the slowing economy, despite cooling inflation and a stronger yuan, which have fanned market expectations of such a move, policy sources told Reuters. But the People’s Bank of China (PBOC) is likely to cut market-based rates and further lower banks’ reserve ratios (RRR) to boost credit growth and reduce firms’ borrowing costs, according to the sources involved in internal policy discussions. “We cannot rule out a (benc
China’s central bank is said to see benchmark rate cut as the last resort Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-21  Authors: jason lee
Keywords: news, cnbc, companies, reduce, risk, chinas, rate, central, policy, cut, sources, bank, pboc, rrr, resort, rates, benchmark


China's central bank is said to see benchmark rate cut as the last resort

China’s central bank is not yet ready to cut benchmark interest rates to spur the slowing economy, despite cooling inflation and a stronger yuan, which have fanned market expectations of such a move, policy sources told Reuters.

But the People’s Bank of China (PBOC) is likely to cut market-based rates and further lower banks’ reserve ratios (RRR) to boost credit growth and reduce firms’ borrowing costs, according to the sources involved in internal policy discussions.

“We cannot rule out a (benchmark) rate cut, but we still need to watch economic data for a few months,” one said. “There is no sufficient reason for cutting benchmark rates if we look at the huge amount of new loans in January.”

China’s trading partners and major central banks are increasingly concerned over how quickly the world’s second-largest economy is decelerating, with investors asking if Beijing needs to speed up or intensify support measures to reduce the risk of a sharper slowdown.

Analysts polled by Reuters expect China’s official growth rate to cool to 6.3 percent in 2019, a 29-year low, and some believe real activity is already much weaker than government data suggest.

But China watchers note the PBOC has many policy tools to choose from before turning to blunter instruments such as a lending rate cut, which would bring down financing costs across the board but risk adding to a mountain of debt.

More RRR cuts have been widely expected in coming quarters after five over the past year, most recently in January. The PBOC has also been guiding money market rates lower in various ways, and offered a slightly better rate on a new medium-term lending programme launched in January.

The PBOC did not immediately respond to Reuters request for comment.


Company: cnbc, Activity: cnbc, Date: 2019-02-21  Authors: jason lee
Keywords: news, cnbc, companies, reduce, risk, chinas, rate, central, policy, cut, sources, bank, pboc, rrr, resort, rates, benchmark


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Slowest home sales in over three years could help buyers this spring

Lower mortgage rates should have given home sales a boost in January, but they did not. That is why sales of homes priced below $100,000 were nearly 15 percent lower compared with a year ago, while sales of homes priced above $750,000 were just 2 percent lower. Lower mortgage rates also helped sentiment. After spiking in September, mortgage rates began falling in November and fell even more sharply in December. Most analysts think the recent drop in mortgage interest rates will bring more buyers


Lower mortgage rates should have given home sales a boost in January, but they did not. That is why sales of homes priced below $100,000 were nearly 15 percent lower compared with a year ago, while sales of homes priced above $750,000 were just 2 percent lower. Lower mortgage rates also helped sentiment. After spiking in September, mortgage rates began falling in November and fell even more sharply in December. Most analysts think the recent drop in mortgage interest rates will bring more buyers
Slowest home sales in over three years could help buyers this spring Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-21  Authors: diana olick, getty images
Keywords: news, cnbc, companies, slowest, help, homes, buyers, compared, sales, prices, housing, spring, market, mortgage, lower, rates


Slowest home sales in over three years could help buyers this spring

Lower mortgage rates should have given home sales a boost in January, but they did not. Sales of existing homes fell 1.2 percent to their lowest level in three years compared with December and were a wider 8.5 percent lower annually, according to the National Association of Realtors.

That could be good news for buyers seeking relative bargains in the spring.

Real estate agents and analysts have long been blaming weak sales on too few listings and rising rates — but supply has been rising steadily for several months and rates have been falling. Total housing inventory at the end of January increased to 1.59 million, up from 1.53 million homes for sale in December. Supply is also up from 1.52 million a year ago.

Home prices are still higher compared to a year ago. The median price of an existing home sold in January was $247,500. But that is just 2.8 percent higher compared with January 2018, the smallest annual gain since February 2012.

“Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low,” said Lawrence Yun, chief economist for the NAR. “Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”

But here’s the rub: The supply of affordable homes for sale is not increasing quickly enough. That is why sales of homes priced below $100,000 were nearly 15 percent lower compared with a year ago, while sales of homes priced above $750,000 were just 2 percent lower.

Homebuilders are still not ramping up production enough to meet demand, especially in the entry-level market. Sales of newly built homes, which come at a price premium to existing homes, were weak for much of last year.

Builders are starting to see more traffic through models, as they lower some prices and offer more concessions. But they are still finding it hard to build cheaper homes.

“Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points,” said Robert Dietz, chief economist for the National Association of Home Builders.

Builder sentiment rose in February overall, as buyer traffic and sales expectations for the next six months saw significant gains, according to the NAHB. Lower mortgage rates also helped sentiment.

After spiking in September, mortgage rates began falling in November and fell even more sharply in December. They are now at the lowest rate in a year.

Most analysts think the recent drop in mortgage interest rates will bring more buyers back to the market. But home prices are still high, due to the sharp run-up after the recession.

That has kept some first-time buyers sidelined. They represented just 29 percent of existing home sales in January, compared with 32 percent in December. Historically, first-time buyers represent about 40 percent of home sales.

“If mortgage rates stay close to these new lower levels, then the hit to affordability from rising rates will be reduced – and the positive impacts of the job market and demographics should flow through to stronger housing demand,” said David Berson, chief economist at Nationwide.

Lower mortgage rates, combined with slower home price appreciation, are bringing the housing market out of its recent overheating and into a more moderate environment with respect to the rest of the economy.

“Wages are growing on par with home prices for the first time in years, and with more inventory available, spring home sales should help the market begin to recover from the malaise of the last few months,” said Sam Khater, chief economist at Freddie Mac.


Company: cnbc, Activity: cnbc, Date: 2019-02-21  Authors: diana olick, getty images
Keywords: news, cnbc, companies, slowest, help, homes, buyers, compared, sales, prices, housing, spring, market, mortgage, lower, rates


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Treasury yields fall amid US-China trade talks; Fed minutes in focus

U.S. government debt prices were higher on Wednesday as investors watched out for developments in the latest round of U.S.-China trade talks. The yield on the benchmark 10-year Treasury note sank to around 2.634 percent, while the yield on the 30-year Treasury bond slipped to 2.978 percent. Higher level talks are expected to arrive later in the week, the White House said Monday. Meanwhile, market players will keep an eye out for Federal Reserve minutes from the central bank’s January meeting, wh


U.S. government debt prices were higher on Wednesday as investors watched out for developments in the latest round of U.S.-China trade talks. The yield on the benchmark 10-year Treasury note sank to around 2.634 percent, while the yield on the 30-year Treasury bond slipped to 2.978 percent. Higher level talks are expected to arrive later in the week, the White House said Monday. Meanwhile, market players will keep an eye out for Federal Reserve minutes from the central bank’s January meeting, wh
Treasury yields fall amid US-China trade talks; Fed minutes in focus Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-20  Authors: ryan browne
Keywords: news, cnbc, companies, rates, amid, fall, yield, reserve, fed, level, focus, higher, uschina, treasury, talks, players, latest, yields, market, minutes, trade


Treasury yields fall amid US-China trade talks; Fed minutes in focus

U.S. government debt prices were higher on Wednesday as investors watched out for developments in the latest round of U.S.-China trade talks.

The yield on the benchmark 10-year Treasury note sank to around 2.634 percent, while the yield on the 30-year Treasury bond slipped to 2.978 percent. Bond yields move inversely to prices.

Fixed income traders are keeping an eye on the latest global trade developments, after U.S. and Chinese officials met for a fresh set of discussions on Tuesday. Higher level talks are expected to arrive later in the week, the White House said Monday.

President Donald Trump said on Tuesday that the March 1 deadline for the two nations to reach a deal was not a “magical date,” hinting at an extension to the target date.

Meanwhile, market players will keep an eye out for Federal Reserve minutes from the central bank’s January meeting, which are due to be published Wednesday at 2 p.m. ET.

In other Fed news, New York Federal Reserve President John Williams said Tuesday that he was content with the current level of U.S. interest rates. The policymaker said he didn’t see any reason to hike rates again except in the event of surprising growth or inflation data.

The Fed’s raising of rates four times last year was a big point of anxiety for the markets, with market players nervous about the pace of the central bank’s stimulus tightening. The institution paused its once quarterly rate hikes last month, amid concerns of a potential slowdown in economic growth.


Company: cnbc, Activity: cnbc, Date: 2019-02-20  Authors: ryan browne
Keywords: news, cnbc, companies, rates, amid, fall, yield, reserve, fed, level, focus, higher, uschina, treasury, talks, players, latest, yields, market, minutes, trade


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Investors are buying both stocks and bonds at the same time and the Federal Reserve is to blame

The bond market looks like it sees a recession on the horizon, while the stock market appears to have plenty to be optimistic about — including a possible trade deal. But in reality, it’s the Federal Reserve that’s made investors happy to buy both markets, and that’s driven bond market volatility to near record lows and the VIX, the stock market’s volatility index, to a low in the mid teens. Bond yields move opposite price, so as stocks have risen, yields — or interest rates — have been coming d


The bond market looks like it sees a recession on the horizon, while the stock market appears to have plenty to be optimistic about — including a possible trade deal. But in reality, it’s the Federal Reserve that’s made investors happy to buy both markets, and that’s driven bond market volatility to near record lows and the VIX, the stock market’s volatility index, to a low in the mid teens. Bond yields move opposite price, so as stocks have risen, yields — or interest rates — have been coming d
Investors are buying both stocks and bonds at the same time and the Federal Reserve is to blame Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: patti domm, daniel acker, bloomberg, getty images
Keywords: news, cnbc, companies, blame, yields, reserve, markets, lower, market, federal, stocks, fed, bond, low, bonds, buying, rates, volatility, investors, stock


Investors are buying both stocks and bonds at the same time and the Federal Reserve is to blame

The bond market looks like it sees a recession on the horizon, while the stock market appears to have plenty to be optimistic about — including a possible trade deal.

But in reality, it’s the Federal Reserve that’s made investors happy to buy both markets, and that’s driven bond market volatility to near record lows and the VIX, the stock market’s volatility index, to a low in the mid teens. On Wednesday, the Fed releases the minutes of the Jan. 30 meeting, the one where it did an about face and indicated it could hold off raising interest rates and stop the unwind of its balance sheet sooner than expected.

The so-called ‘Powell pivot’ has brought a relative lull to markets after the wildness of late 2018, where the stock market plummeted and bond yields dipped amid fears of both recession and that the Fed was raising interest rates too much. Fed Chairman Jerome Powell, in a briefing after that meeting, stressed the Fed would be ‘patient’ and flexible.

“It almost seems like we’re back in a bit of a QE period, where the S&P keeps ripping and rates are flat. I think a lot of this has to do with Fed guidance,” said Mark Cabana, head of short rate strategy at Bank of America Merrill Lynch. QE, or quantitative easing, was the financial crisis era asset purchase program the Fed embarked on to add liquidity to markets and help the economy. It is now in the process of shrinking its balance sheet, by replacing fewer securities as they mature.

“If you look at the January FOMC on Jan. 30, since that point in time, rates are lower by around 10 basis points (on the 10-year) and the stock market is up 5 percent,” said Cabana. Because it had such a profound impact on markets, market pros are now watching closely to see if the Fed gives more details on its balance sheet or explains why it suddenly switched to a policy of holding back on rate hikes for now.

“The big questions they have to answer are whats the minimum quantity of reserves they’d like to have in the system? What are their thoughts on tapering. Is it useful?…What’s the composition of the Fed balance sheet assets they would ideally like in the long run?” said Cabana.

The 10-year yield fell Tuesday, trading as low as 2.63 percent.

“I think that’s a function of the market continuing to be worried about the economic outlook and looking to a potential recession. We’re heading to the lower end of the yield range. The market has been in ‘buy the dip’ mode ever since the Fed changed its tune,” said John Briggs, head of strategy at NatWest Markets. “Part of it is the grind lower in European yields, the economic news continues to be poor and part of it is looking ahead to the FOMC minutes..”

U.S. yields often follow the German bund yields, which have moved lower on weaker European data and political uncertainty in Europe. The German 10-year bund yield was 0.10 percent Tuesday, whilel the U.S. 10-year has been in a recent range of 2.60 to 2.80 percent.

“You’ve gone from a Fed on the move to a Fed on hold,” Briggs said. “The global growth outlook has gotten worse and global central banks have turned more dovish. The winds are shifting in that direction rather than the other way…Nobody’s moving like people thought they would six to eight months ago.”

The fact that both stock and bond prices are rising is not the usual state of things. While it can happen, traders take it to mean that one market is getting it wrong. For instance, the bond market may prove to be overly gloomy for pricing in the potential for a future recession, or the stock market may turn out to be just too exuberant as it moved higher with no regard for a slowing global economy or weaker earnings. Bond yields move opposite price, so as stocks have risen, yields — or interest rates — have been coming down.

“One way to interpret the moves is an extremely dovish Fed is going to keep interest rates low, and let risk rise. The Fed’s goal at this point is to extend the expansion,” said BMO senior rate strategist Jon Hill. “If they’re able to do so, that means lower rates, higher equities. If they’re not able to do it we’re looking at the end of the cycle and looking back at zero rates,’ he said. “The Fed would start cutting rates, possibly as far as returning to zero percent.”

Hill said the mystery is the dollar and why it continues to rise as yields slide. One explanation is that the dollar is trading higher on the fact the U.S. economy is still relatively strong compared to other parts of the world.

The fact that the bond market has become far less volatile is apparent in the Merrill Lynch MOVE index. It has returned to a near historic level it has been at 2017 and again in 2018, but also during the financial crisis. The index is based on options on Treasurys.

“The volatility, in terms of implied volatility is quite low. We think that has to do with uncertainty being high and the Fed being very soothing. The Fed being soothing takes out the risk that they would look to move any time soon. That depresses vol,” said Cabana. He said the market is also wary of Brexit, the U.S.-China trade talks and political discontent in Europe, among other things.

“It reduces market participant’s willingness to have firm macro views…The uncertainty is weighing on market participants’ and business. How are you going to decide to make a big R and D and cap ex expenditures when you’re worried a key par to your supply chain could be subject to a 25 percent cost increase. That uncertainty coupled with a dovish Fed is contributing to low levels of volatility,” said Cabana.

Strategists say the Fed could return to raising interest rates, if a trade deal is struck between the U.S. and China and the economic data improves.


Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: patti domm, daniel acker, bloomberg, getty images
Keywords: news, cnbc, companies, blame, yields, reserve, markets, lower, market, federal, stocks, fed, bond, low, bonds, buying, rates, volatility, investors, stock


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The next big market catalyst will be what the Fed says about its balance sheet this week

The market has reason to believe that the Fed is going to stop raising interest rates for a while. Less certain is what the central bank will do with the $4 trillion of bonds left on its balance sheet. “The minutes from the two preceding meetings – November and December – included important sections on the balance sheet,” Lewis Alexander, chief economist at Nomura, said in a note. “We believe the corresponding section of the January minutes will confirm the Committee’s plans to end balance sheet


The market has reason to believe that the Fed is going to stop raising interest rates for a while. Less certain is what the central bank will do with the $4 trillion of bonds left on its balance sheet. “The minutes from the two preceding meetings – November and December – included important sections on the balance sheet,” Lewis Alexander, chief economist at Nomura, said in a note. “We believe the corresponding section of the January minutes will confirm the Committee’s plans to end balance sheet
The next big market catalyst will be what the Fed says about its balance sheet this week Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: jeff cox, leah millis
Keywords: news, cnbc, companies, trillion, week, balance, reserves, process, catalyst, market, minutes, sheet, fed, meeting, big, rates


The next big market catalyst will be what the Fed says about its balance sheet this week

The market has reason to believe that the Fed is going to stop raising interest rates for a while. Less certain is what the central bank will do with the $4 trillion of bonds left on its balance sheet.

That latter issue is likely to take focus Wednesday when the Federal Open Market Committee releases notes from its January meeting. At that meeting, Chairman Jerome Powell and his fellow committee members made it clear that they would be “patient” with rate hikes and that for now policy tightening will be on pause.

However, while Powell indicated he would be watching how the process unfolds, there were no indications the roll-off would slow.

The Fed currently allows up to $50 billion a month in proceeds from Treasurys and mortgage-backed securities, though it does not regularly hit that number. Since the process began the bond portfolio has shrunk by more than $400 billion. The balance sheet had once stood at $4.5 trillion, the product of three rounds of bond buying — quantitative easing — the Fed instituted to lower long-term rates and pull the economy out of the financial crisis.

Market participants are now wondering how much further the Fed will go. The minutes from the meeting, which helped spark a stock market rally, will be looked at closely.

“The minutes from the two preceding meetings – November and December – included important sections on the balance sheet,” Lewis Alexander, chief economist at Nomura, said in a note. “We believe the corresponding section of the January minutes will confirm the Committee’s plans to end balance sheet normalization by end-2019.”

Several Fed officials have pointed to the end of the year as a likely point for the process to end, but even that remains in flux.

The key in the discussions thus far is the level of reserves at which the banking industry feels comfortable. The decline in the balance sheet corresponds with a lower level of reserves. Currently, banks are holding about $1.64 trillion in reserves, or nearly $1.5 trillion above the required level.

Many Fed watchers think the final level will be somewhere just in excess of $1 trillion, though some see it higher.

“Once we reach $1.1 [trillion] of reserves, the normalization is done,” wrote Jabaz Mathai, head of U.S. rates strategy at Citigroup.


Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: jeff cox, leah millis
Keywords: news, cnbc, companies, trillion, week, balance, reserves, process, catalyst, market, minutes, sheet, fed, meeting, big, rates


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Fed’s Williams says new economic outlook necessary for rate hikes

“I don’t think that it would take a big change, but it would be a different outlook either for growth or inflation” to return to hiking rates, Williams, one three Fed vice chairs and a key voice on rate policy, told Reuters. The Fed could also keep levels of bank reserves on its books that are far closer to current levels than previously thought, Williams said. Williams estimated the so-called balance sheet rolloff could end when bank reserves get to “maybe $1 trillion of reserves or somewhat mo


“I don’t think that it would take a big change, but it would be a different outlook either for growth or inflation” to return to hiking rates, Williams, one three Fed vice chairs and a key voice on rate policy, told Reuters. The Fed could also keep levels of bank reserves on its books that are far closer to current levels than previously thought, Williams said. Williams estimated the so-called balance sheet rolloff could end when bank reserves get to “maybe $1 trillion of reserves or somewhat mo
Fed’s Williams says new economic outlook necessary for rate hikes Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: seongjoon cho, bloomberg, getty images
Keywords: news, cnbc, companies, reserves, feds, end, growth, hikes, rates, fed, outlook, meeting, bank, rate, economic, policymakers, policy, williams, necessary


Fed's Williams says new economic outlook necessary for rate hikes

New York Fed President John Williams on Tuesday said he was comfortable with the level U.S. interest rates are at now, and sees no need to raise them again unless growth or inflation shift to an unexpectedly higher gear.

In an interview with Reuters, Williams said he felt rates had reached his current view of a lower “neutral” level, with growth and unemployment leveling off and inflation, if anything, a bit weaker than hoped for.

Asked if it would take some sort of shock to resume rate increases, he said it would require one or more of those factors to surprise to the upside.

“I don’t think that it would take a big change, but it would be a different outlook either for growth or inflation” to return to hiking rates, Williams, one three Fed vice chairs and a key voice on rate policy, told Reuters.

Williams’ comments, made just weeks after the central bank paused its once quarterly rate hikes, underscore just how high the bar would be for tighter monetary policy, and suggest that such a move may not come any time soon.

The Fed could also keep levels of bank reserves on its books that are far closer to current levels than previously thought, Williams said.

Along with its rate-hike holiday, policymakers are currently finalizing plans on how they would end the reduction of their balance sheet, which includes holdings of bank reserves bulked up in part by the Fed’s need for cash to buy bonds to halt the global financial crisis a decade ago.

Williams estimated the so-called balance sheet rolloff could end when bank reserves get to “maybe $1 trillion of reserves or somewhat more than that,” about $600 billion less than current levels.

The figure is “a guess today of the amount of reserves that will be held in the system in the future – but again we are learning and will get a finer touch on that,” he said.

Williams, who is vice chairman of the rate-setting Federal Open Market Committee and votes whenever that group meets, said policymakers are “in a very good place” on policy, with rates around neutral, the U.S. economy in a strong place and pressures on prices subdued.

“Monetary policy is where it should be,” he said. “It’s around my view of what neutral interest rates are.”

After its most recent meeting, Fed policymakers signaled their three-year drive to tighten monetary policy may be at an end due to a suddenly cloudy outlook for the U.S. economy, a global growth slowdown and impasses over trade and government budget negotiations.

The Fed increased interest rates three times in 2017 and four times last year, pushing them up to 2.25 percent to 2.5 percent at its final 2018 meeting in December.

Further details on that policy meeting at the end of January are expected when the Fed releases records from its deliberations on Wednesday. In recent days Cleveland Federal Reserve President Loretta Mester and Fed Governor Lael Brainard both said they supported ending the U.S. central bank’s unwinding of its bond holdings this year. The Fed’s balance sheet ballooned to over $4 trillion in the wake of the 2007-09 recession but policymakers began trimming its bond holdings in the final months of 2017. Further details on that policy meeting at the end of January are expected when the Fed releases records from its deliberations on Wednesday.


Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: seongjoon cho, bloomberg, getty images
Keywords: news, cnbc, companies, reserves, feds, end, growth, hikes, rates, fed, outlook, meeting, bank, rate, economic, policymakers, policy, williams, necessary


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Homebuilder sentiment rises as interest rates stay in check

The nation’s homebuilders are feeling better about the state of their industry as lower interest rates boost consumer confidence. Sentiment fell at the end of last year, largely because mortgage rates jumped in the fall, hurting affordability. Newly built homes come at a price premium to existing homes, so higher interest rates can have an outsize effect on the new construction market. Interest rates then fell sharply at the end of the year and have remained lower this year. “Ongoing reduction i


The nation’s homebuilders are feeling better about the state of their industry as lower interest rates boost consumer confidence. Sentiment fell at the end of last year, largely because mortgage rates jumped in the fall, hurting affordability. Newly built homes come at a price premium to existing homes, so higher interest rates can have an outsize effect on the new construction market. Interest rates then fell sharply at the end of the year and have remained lower this year. “Ongoing reduction i
Homebuilder sentiment rises as interest rates stay in check Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: diana olick, lisa rizzolo, david paul morris, bloomberg, getty images
Keywords: news, cnbc, companies, rises, rates, newly, lower, stay, sentiment, mortgage, check, interest, market, homebuilder, sales, housing, points, homes


Homebuilder sentiment rises as interest rates stay in check

The nation’s homebuilders are feeling better about the state of their industry as lower interest rates boost consumer confidence.

Builder sentiment rose 4 points to 62 in February, according to a monthly survey from the National Association of Home Builders/Wells Fargo Housing Market Index. The survey stood at 71 last February. Anything above 50 on the index is considered positive.

Sentiment fell at the end of last year, largely because mortgage rates jumped in the fall, hurting affordability. Newly built homes come at a price premium to existing homes, so higher interest rates can have an outsize effect on the new construction market. Interest rates then fell sharply at the end of the year and have remained lower this year.

“Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” said NAHB Chairman Randy Noel. “In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season.”

Of the index’s three components, buyer traffic moved up 4 points to 48. Current sales conditions rose 3 points to 67, and sales expectations over the next six months increased 5 points to 68. February marks the second month where all three of the indexes showed gains.

Sales of newly built homes have been hard to read, due to the recent government shutdown and delays in reporting from the U.S. Census. Several sources noted a sharp decline in sales toward the end of the year, with a slight improvement in January. Mortgage applications to purchase newly built homes were flat in January compared with January 2018, according to the Mortgage Bankers Association. The cost to build homes continues to be a concern.

“Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points,” said NAHB Chief Economist Robert Dietz.

Housing starts and builder permits data have not been reported since last year, but they have been running well below demand and historical averages since the housing crash. While single-family starts are slowly rising, there continues to be a critical shortage of homes for sale, especially at lower, more affordable prices.

Builders are still focused most on the move-up sector of the housing market, as the costs of land, labor and materials continue to run high, making it more difficult financially to build lower-priced homes.


Company: cnbc, Activity: cnbc, Date: 2019-02-19  Authors: diana olick, lisa rizzolo, david paul morris, bloomberg, getty images
Keywords: news, cnbc, companies, rises, rates, newly, lower, stay, sentiment, mortgage, check, interest, market, homebuilder, sales, housing, points, homes


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Asia has ‘mitigating factors’ to counter a global growth slowdown, says bank CEO

Global growth is expected to slow in the coming months, but Asian economies could hold up reasonably well, thanks to several “mitigating factors,” according to the chief executive of Southeast Asia’s largest bank. Gupta noted that Asia is still projected to grow at 5.5 percent to 6 percent this year despite the overall softer global environment. Several central banks in Asia — including those in China, India and Australia — have lowered interest rates or indicated the intention to do so in the c


Global growth is expected to slow in the coming months, but Asian economies could hold up reasonably well, thanks to several “mitigating factors,” according to the chief executive of Southeast Asia’s largest bank. Gupta noted that Asia is still projected to grow at 5.5 percent to 6 percent this year despite the overall softer global environment. Several central banks in Asia — including those in China, India and Australia — have lowered interest rates or indicated the intention to do so in the c
Asia has ‘mitigating factors’ to counter a global growth slowdown, says bank CEO Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-18  Authors: yen nee lee
Keywords: news, cnbc, companies, interest, bank, mitigating, ceo, think, told, rates, growth, overall, global, months, factors, slowdown, coming, counter, asia


Asia has 'mitigating factors' to counter a global growth slowdown, says bank CEO

Global growth is expected to slow in the coming months, but Asian economies could hold up reasonably well, thanks to several “mitigating factors,” according to the chief executive of Southeast Asia’s largest bank.

“The overall macro-economy will be a tad bit slower, but I do think that there are some mitigating factors: Monetary policies are getting looser, I think there are some fiscal stimulus coming down the pipe,” Piyush Gupta, CEO of Singapore’s DBS Group Holdings, told CNBC’s “Capital Connection” on Monday.

Gupta noted that Asia is still projected to grow at 5.5 percent to 6 percent this year despite the overall softer global environment. Several central banks in Asia — including those in China, India and Australia — have lowered interest rates or indicated the intention to do so in the coming months in an attempt to shore up economic growth, the CEO added.

In addition, the U.S. Federal Reserve holding back from raising interest rates further is good news for Asia, said Steve Cochrane, chief Asia Pacific economist at Moody’s Analytics.

“It means that there’s a little less pressure on foreign exchange,” he told CNBC’s “Squawk Box” on Monday.


Company: cnbc, Activity: cnbc, Date: 2019-02-18  Authors: yen nee lee
Keywords: news, cnbc, companies, interest, bank, mitigating, ceo, think, told, rates, growth, overall, global, months, factors, slowdown, coming, counter, asia


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Stocks rally on US-China trade deal but bond investors fear recession

“I think there’s a couple of things in the bond market that don’t connect to reality the way the equity market sees it,” said Hogan. Conversely, “I don’t think the bond market is behind that narrative,” Hogan added. “The bond market is looking at the economic data stream and reflecting on the negatives.” “Is the bond market expressing the longer term consensus? That is how the bond market is now responding to weak data — as if it is forecasting an economic storm, or even recession that may not c


“I think there’s a couple of things in the bond market that don’t connect to reality the way the equity market sees it,” said Hogan. Conversely, “I don’t think the bond market is behind that narrative,” Hogan added. “The bond market is looking at the economic data stream and reflecting on the negatives.” “Is the bond market expressing the longer term consensus? That is how the bond market is now responding to weak data — as if it is forecasting an economic storm, or even recession that may not c
Stocks rally on US-China trade deal but bond investors fear recession Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-17  Authors: patti domm, ralph orlowski, bloomberg, getty images, -chris rupkey, chief financial economist, mufg union bank
Keywords: news, cnbc, companies, recession, uschina, trade, fear, bond, trading, think, market, rates, growth, investors, stock, deal, stocks, pande, rally, fed


Stocks rally on US-China trade deal but bond investors fear recession

Trade talks between the U.S. and China appear to be making some progress and are scheduled to continue in the coming week. That has helped lift stocks, with the S&P 500 up 2.5 percent and the Dow gaining 3 percent in the past week.

The Federal Reserve’s about-face on policy in January has also helped lift stocks and keep bond yields low. After its Jan. 30 meeting, the central bank indicated it is not in a hurry to raise interest rates, and that it could slow down the process to reduce its balance sheet.

For their part, stock investors love low interest rates and an easy Fed. Lower rates also means bond yields do not need to move higher, particularly in an economy that is growing slower with no inflation pressures.

Important for investors is that when these two markets trade in the same direction, there ultimately is a breakout and one dictates direction.

“I think there’s a couple of things in the bond market that don’t connect to reality the way the equity market sees it,” said Hogan.

In his view, the stock market is moving higher based on three assumptions: An end to the U.S.-China trade fight, an accomodative Fed, and continued economic stability in both the U.S. and China.

Conversely, “I don’t think the bond market is behind that narrative,” Hogan added. “The bond market is looking at the economic data stream and reflecting on the negatives.”

Vinay Pande, head of trading strategies at UBS Global Wealth Management, said that the bond market is not trading as if it were reflecting the same growth expectations of the stock market. “Most economists think the economy is slowing, but we don’t know how much it’s slowing. That’s a bit of an issue for the Fed, and that’s why they’re going to be on hold.”

He explained that currently, bonds look as if they see growth a full percentage point below what economists have forecast. The median fourth quarter GDP growth forecast is 2.4 percent, while first quarter is 2 percent, according to CNBC/Moody’s Analytics Rapid Update.

“Is the bond market expressing the longer term consensus? No, it’s not,” said Pande. “The bond market is really trading like it’s a reinsurance market,” where reinsurers will raise prices with each successive event: If there were hurricanes five years in a row, they would still charge as though another hurricane was expected in the sixth year.

That is how the bond market is now responding to weak data — as if it is forecasting an economic storm, or even recession that may not come.

“There’s a muscle memory to this,” Pande added.


Company: cnbc, Activity: cnbc, Date: 2019-02-17  Authors: patti domm, ralph orlowski, bloomberg, getty images, -chris rupkey, chief financial economist, mufg union bank
Keywords: news, cnbc, companies, recession, uschina, trade, fear, bond, trading, think, market, rates, growth, investors, stock, deal, stocks, pande, rally, fed


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Allianz fourth-quarter net profit up 19 percent, in line with expectations

German insurer Allianz said on Friday that net profit rose 19 percent in the fourth quarter from a year earlier, in line with expectations. Net profit attributable to shareholders of 1.697 billion euros ($1.92 billion) compares with the 1.715 billion euro profit forecast by analysts in a Reuters poll and is up from 1.427 billion euros a year ago. Speaking to CNBC’s “Squawk Box Europe” on Friday, Allianz CFO Giulio Terzariol said: “In our performance in 2018 we have been very capable (of managing


German insurer Allianz said on Friday that net profit rose 19 percent in the fourth quarter from a year earlier, in line with expectations. Net profit attributable to shareholders of 1.697 billion euros ($1.92 billion) compares with the 1.715 billion euro profit forecast by analysts in a Reuters poll and is up from 1.427 billion euros a year ago. Speaking to CNBC’s “Squawk Box Europe” on Friday, Allianz CFO Giulio Terzariol said: “In our performance in 2018 we have been very capable (of managing
Allianz fourth-quarter net profit up 19 percent, in line with expectations Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-15  Authors: getty images
Keywords: news, cnbc, companies, euros, profit, allianz, terzariol, net, europe, line, fourthquarter, 19, weve, billion, interest, unadjustedbecause, expectations, rates


Allianz fourth-quarter net profit up 19 percent, in line with expectations

German insurer Allianz said on Friday that net profit rose 19 percent in the fourth quarter from a year earlier, in line with expectations.

Net profit attributable to shareholders of 1.697 billion euros ($1.92 billion) compares with the 1.715 billion euro profit forecast by analysts in a Reuters poll and is up from 1.427 billion euros a year ago.

Speaking to CNBC’s “Squawk Box Europe” on Friday, Allianz CFO Giulio Terzariol said: “In our performance in 2018 we have been very capable (of managing) headwinds to achieve record results on most of our KPIs.”

He added that the bank expected the ECB to leave interest rates unadjusted.

“Because of the tension we might have – let’s say Italy and Brexit – and because of the economy we would expect interest rates to stay relatively flat in Europe, which is not necessarily an issue for us because we’ve been in this situation for a few years,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-02-15  Authors: getty images
Keywords: news, cnbc, companies, euros, profit, allianz, terzariol, net, europe, line, fourthquarter, 19, weve, billion, interest, unadjustedbecause, expectations, rates


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