Last week’s ‘Word of the Week’ was undeniably deflation. Some highly anticipated press conferences on Thursday put the word to work. The first came from Mario Draghi, who provided transparency on the European Central Bank’s plan to fight the shriveling Eurozone economy. Later that afternoon, Tom Brady gave some clouded responses to questions on his organization’s own deflation issues, and the crisis of ‘deflategate.’ While we’re sick of hearing about deflated footballs, we are eager to see how the market reacts to the new European Quantitative Easing plan over the coming weeks.
The market reaction to the ECB’s announcement to purchase €60 billion worth of bonds a month until at least September 2016 was fairly strong. The Euro fell to $1.1229, government bond yields in the Eurozone sank, and European equities surged with confidence. The 10-year US Treasury yield reacted by dipping as low as 1.78% inter-day and ended Friday at 1.79%. US equities finished higher for the week, up over 2%.
The President’s State of the Union address was also last week, which emphasized ‘middle-class economics,’ but ultimately received more attention for Obama’s ad-libbing at the crowd’s reactions. In CMBS news, Standard and Poor’s reached a settlement with the SEC on Wednesday regarding the accusation of loosening ratings criteria in 2011. S&P was struck with $77 million in fines and ‘a one-year timeout from rating conduit fusion CMBS.’
CMBS spreads tightened just slightly for the shortened week and trading volume peaked at $600 million on Wednesday, the highest bid list activity in months. Legacy and new issue spreads moved tighter across the board.
The market reaction to the ECB’s announcement to purchase €60 billion worth of bonds a month until at least September 2016 was fairly strong. The Euro fell to $1.1229, government bond yields in the Eurozone sank, and European equities surged with confidence. The 10-year US Treasury yield reacted by dipping as low as 1.78% inter-day and ended Friday at 1.79%. US equities finished higher for the week, up over 2%.
The President’s State of the Union address was also last week, which emphasized ‘middle-class economics,’ but ultimately received more attention for Obama’s ad-libbing at the crowd’s reactions. In CMBS news, Standard and Poor’s reached a settlement with the SEC on Wednesday regarding the accusation of loosening ratings criteria in 2011. S&P was struck with $77 million in fines and ‘a one-year timeout from rating conduit fusion CMBS.’
CMBS spreads tightened just slightly for the shortened week and trading volume peaked at $600 million on Wednesday, the highest bid list activity in months. Legacy and new issue spreads moved tighter across the board.
CMBS Swap Spreads
Legacy LCF Price and Swap Price Movement
No comments:
Post a Comment