Archive For "January, 2011"

WASHINGTON (MarketWatch) — The U.S. government is expected to borrow $237 billion in the current quarter, an estimate $194 billion less than previously forecasted, the Treasury Department said Monday. The decrease relates to the Treasury decision to allow its holdings in a special account at the Federal Reserve to call to $5 billion from $200 billion as it needed more flexibility as it nears its debt limit. The government borrowed $363 billion in the October through December quarter. Treasury assumes an end-of-March cash balance of $65. For the April-June quarter, Treasury said it expects to borrow $299 billion with a cash balance of $95 billion. The agency will announce on Wednesday the sizes and terms of the auctions that it holds four times a year to finance the debt.

WASHINGTON (MarketWatch) — Banks were significantly more upbeat this year about the quality of loans across categories than they have been in past years, the Federal Reserve said Monday. “Moderate to large net fractions of banks reported that they expected improvements in delinquency and charge-off rates during 2011 in every major loan category,” the Fed said. The survey also found that banks continued to make it easier for companies to borrow in the fourth quarter.

WASHINGTON (MarketWatch) – Inflation should rise only gradually over the next two years to “healthier” levels from current “very low levels,” said Dennis Lockhart, the president of the Atlanta Federal Reserve Bank on Monday. A few months ago, fear of deflation was justified but recently this concern has abated as the rate of inflation has stabilized, Lockhart said in remarks at Miami Dade College. Many economists see inflation as a looming threat because of higher oil and food prices. Lockhart said that these higher input costs have not translated into broad inflation. He noted that inflation expectations have stabilized in a “healthy range.” Lockhart said the economy is making real, but fitful progress. “The moderate pace of economic expansion seems to have momentum and I believe it should prove sustainable as the year progresses,” he said.

NEW YORK (MarketWatch) — The Federal Reserve Bank of New York bought $7.72 billion in Treasury debt on Monday, adding to the $351 billion the central bank has bought already since August. The buybacks are part of the Fed’s second round of quantitative easing to keep interest rates from rising too much. They include purchases made under a previous program to reinvest cash from its maturing mortgage-related holdings back into Treasurys. Dealers offered to sell the Fed $37.238 billion in debt maturing from 2013 through 2014. The broader bond market had recovered from small losses before the buyback ended, and edged back down after the buyback. Yields on 10-year notes , which move inversely to prices, rose 2 basis points to 3.35%.

NEW YORK (MarketWatch) — Treasury prices and the dollar stayed under pressure on Monday after an index of manufacturing activity around Chicago this month rose to a higher level than economists expected. The dollar index , which tracks the greenback against a basket of six other currencies, slipped to 77.772, compared with 78.171 late Friday. The euro rose to $1.3703, from $1.3608 late Friday. Yields on 10-year notes , which move inversely to prices, rose 2 basis points to 3.35%.

NEW YORK (MarketWatch) — Treasury prices and the dollar stayed under pressure on Monday after an index of manufacturing activity around Chicago this month rose to a higher level than economists expected. The dollar index , which tracks the greenback against a basket of six other currencies, slipped to 77.772, compared with 78.171 late Friday. The euro rose to $1.3703, from $1.3608 late Friday. Yields on 10-year notes , which move inversely to prices, rose 2 basis points to 3.35%.

The euro shakes off financial-market tensions surrounding ongoing turmoil in Egypt, gaining ground versus the dollar.

NEW YORK (MarketWatch) — The dollar extended losses and Treasury prices stayed under pressure on Monday after a report said consumer spending in December rose 0.7% while incomes rose 0.4%. The dollar index , which tracks the greenback against a basket of six other currencies, slipped to 77.707, from 77.781 before the data and compared with 78.171 late Friday. The euro rose to $1.3725, from $1.3704 earlier and up from $1.3608 late Friday. Yields on 10-year notes , which move inversely to prices, rose 3 basis points to 3.36%. Still to come is a Federal Reserve buyback of 2013-2014 Treasury debt.

WASHINGTON (MarketWatch) — Consumer spending increased a seasonally adjusted 0.7% in December, above expectation and a sign the economy entered the first quarter with momentum, the Commerce Department estimated Monday. Income rose 0.4% in December for the second straight month. Consumer spending has risen in six straight months. Wall Street economists had expected a 0.4% increase in income and a 0.6% gain in spending. With spending outpacing income, the savings rate fell to 5.3% in December from 5.5% in November. This is the lowest level since last March.

WASHINGTON (MarketWatch) — The Commerce Department’s report on personal income and consumer spending for December is due for release at 8:30 a.m. Eastern. Economists polled by MarketWatch expect income to rise 0.4% after a 0.3% increase in December. Consumer spending is forecast to rise 0.6% after a 0.4% gain in the prior month. Markets will pay less attention to the report because much of the data was contained in the fourth quarter gross domestic product report released last Friday. At 9:45 a.m., the Chicago purchasing managers’ business index for January will be released. Economists expect the index to slip to 65% from 68.6% in December.