Forex News | Currency News by Forexlive

Congress should raise it just so they can get rid of Tiny Tim.

• Expects Congress to pass debt deal
• Unimaginable damage if they do not…

The dollar continues to rebound in early Asia after EUR/USD stalled at 1.4540 resistance and after Bloomberg floated the notion of a Geithner departure from the US Treasury.

Nothing like a little Fed-on-Fed crime…

• US weekly jobless claims fall 1,000 to 428,000
• Agreement reached with German banks on Greek debt rollover; EUR 3.2 bln contribution
• IMF: Dollar falls slightly to 60.7% of global reserves, euro edges up to 26.6% share in Q1
• Chicago PMI much firmer than expected at 61.1 in June versus 56.6 in May; market expected decline
• Greece passes second austerity law
• Portuguese PM: New budget data show conditions deteriorating
• KC Fed index jumps to 22 in June from -2 in May
• QE2 comes to an end with final $4.9 bln bond purchase
• Papandreou asks EU to accelerate loan disbursements to Greece to improve growth
• Bloomberg: Geithner may leave US Treasury after debt ceiling deal completed
• S&P adds another 1% to 1321
• US 10-year note rises 4 bp to in yield to 3.16%
• Oil unchanged at $94.80; grains fall sharply

Lots of activity early in the session as a second positive Greek austerity vote and a surprising rebound in the Chicago PMI sent risk trades northward.  EUR/USD rallied as high as 1.4539 before being capped by a resistance line drawn off the spring highs at 1.4942. Afternoon profit-taking was accelerated a bit on informed speculation from Bloomberg (AKA a leak) that Geithner will quit later this summer. Geithner is seen as a “weak dollar guy”, so anyone is likely to be more of a dollar hawk than him…We end the day near 1.4500.

USD/CHF and EUR/CHF roared higher after the cross broke above its 21-day moving average for the first time since mid-April. The move got particularly ugly between 1.2100 and 1.2150 as all manner of stops were triggered. Momentum players sent the cross as high as 1.2245. We end at 1.2195. USD/CHF. Spiked to 0.8464 and closes around 0.8400.

USD/JPY was in demand after Chicago PMI and ahead of the 15:00 GMT fixing as real money sold JPY on one of the semi-annual dividend payment dates for Japanese corporations. (December 31 is the other). 80.86 was the spike high before drifting off to the 80.50 area in the afternoon.

AUD and CAD extended their gains today on hopes the US lull in Q2 may truly be “transitory” after all. AUD reached 1.0750, USD/CAD 0.9626.

–Senate Finance Republicans Blast Dems Over TAA Program Funds
–Sen. Hatch: Dems ‘Playing With Our Country’s Future’
–Senate GOP Derails Meeting On Panama, Colombia, South Korea Deals

By John Shaw

WASHINGTON (MNI) – The Republicans on the Senate Finance Committee
blocked that panel Thursday from considering legislation on pending
trade agreements with Colombia, Panama and South Korea, accusing
Democrats of attaching workers assistance funds to the trade agreements.

The Senate Finance Committee had planned to take up the trade
accords at 3 p.m. Thursday but the session was cancelled when the
Republicans on the committee objected to the meeting and boycotted it.

At a briefing, Sen. Orrin Hatch, the ranking Republican on the
Senate Finance Committee, said all three trade agreements are important
for boosting jobs and economic growth in the U.S.

But he said Democrats wanted to hold the Finance Committee mark-up
late Thursday afternoon to prevent careful consideration of the packs.
He said Democrats also planned to attach a renewal of expiring Trade
Adjustment Assistance funds to the South Korean accord.

“They are playing with our country’s future,” Hatch said, adding
that Democrats are “playing politics with this issue.”

Hatch said the trade agreements with Colombia, Panama and South
Korea have been ready for years, but have languished in Congress.

“We want these agreements,” Hatch said.

“This has become an embarrassment,” said Sen. Pat Roberts, also a
Republican member of the Finance Committee, referring to how long the
three agreements have been pending.

The three trade agreements were negotiated by the George W. Bush
administration, but stalled in Congress when Democrats won control of
the House and Senate in 2007.

Many Republicans argue that the TAA program is ineffective and
costly and oppose funding it.

Hatch and Roberts said the TAA should be considered separately from
the three trade accords.

The Senate Finance Committee is likely to take up the three trade
agreements some time in July

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$,MI$$$$,M$A$$$,MFT$$$]

That’s dollar bullish.

Don’t let the door hit you in the ass on your way out…

Geithner’s resignation would represent a clean sweep of Obama’s original economic team. After he writes his book, who wants to bet he lands at Goldman?

Let the speculation on a replacement begin: I nominate Roger Altman, another Clinton-era retread.

• Hopes for positive resolution with Greece soon

Look for resolution to come at this weekends EU summit, which will be attended by IMF head Lipsky.

Does that mean give me the money faster? Sounds like it to me…Bloomberg headlines can be a nit mysterious, at times.

Looks like they are trying to clan up the headline. Here is the latest attempt: PAPANDREOU SEEKS ACCELERATION OF USE OF EU FUNDS.

Looks like my translation was spot on…

By Steven K. Beckner

ST. LOUIS (MNI) – Research at the Federal Reserve Board confirms
Fed Chairman Ben Bernanke’s contention that quantitative easing has been
effective, a Fed Board staffer said Thursday.

Thomas King, an economist in the Fed Board’s Division of Monetary
Affairs, told a St. Louis Federal Reserve Bank conference on
quantitative easing that large scale asset purchases not only reduced
the yields of securities purchased but lowered the entire yield curve.

King’s paper, co-authored with fellow Fed economist Stefania
d’Amico, looks primarily at the effects of the Fed’s first $300 billion
program of Treasury security purchases.

They look at both the “flow effect” — the impact of each purchase
– and the “stock effect” — the cumulative effect of the amount of
securities held in the Fed portfolio.

“We find that the program resulted in a persistent downward shift
in the yield curve (its ‘stock effect’), amounting to between 20 to 30
basis points in intermediate-maturity zero-coupon yields,” King said.

“In addition, except at very long maturities, purchase operations
caused an average decline in yields in the sector purchased of 3.5 basis
points on the days when they occurred (the ‘flow effect’),” he
continued. “The coefficient patterns generally support a view of
segmentation or imperfect substitution within the Treasury market during
this time.”

King added that the Treasury large-scale asset purchase program
“met the Federal Reserve’s objectives of improving Treasury market
liquidity and contributing to a reduction in the cost of credit.”

“More broadly, our results provide support for preferred-habitat
and portfolio-balance theories of the term structure,” he said.

“Consistent with such theories, we find that:

* (1) “withdraws of Treasury supply decrease yields by an
economically meaningful amount;

* (2) “these decreases are generally biggest for the specific
securities being bought and for securities of similar maturities but
smaller for securities with much different maturities;

* (3) “particularly for stock effects, the discrepancies between
own purchases and substitute purchases are larger among less-liquid
securities (off-the-run bonds); and

* (4) “also among off-the-run bonds, the flow effects are
persistent, suggesting that they are not just due to short-run
rebalancing or microstructure-related distortions.

** Market News International **

[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$]

By Ian McKendry

WASHINGTON (MNI) – Rental rates in the United States continue to
rise as demand for rental properties grows in an already constrained
market, according to industry experts.

“Apartment demand has been extremely strong,” Anika Khan, an
economist with Wells Fargo told Market News International.

A recent report by Wells Fargo showed apartment vacancy rates fell
1.8% over the last year and they estimate multifamily starts will
increase by 40% in 2011 compared to 2010.

“You have traditional renters due to upward momentum in traditional
household formations starting to strike out on their own and definitely
rent apartments,” Khan said.

A report from MPF research published Wednesday said apartment
revenues rose 2.5% in the second quarter as occupancy increased by 0.8%
and effective rental rates rose 1.7%.

“The last time quarterly revenue growth came in at such strong
levels was at the height of the tech boom in 2000 and early 2001,” Greg
Willett, MPF Research vice president said in a statement.

Khan said multifamily completions “have basically winded down to
nearly zero” and that supply will become constrained, potentially having
the effect of forcing renters to rent up vacant residential space.

Bob Satawake, a Chicago based real estate agent told MNI he is
seeing more and more property owners renting their property.

Satawake who will occasionally rent property for clients, said he
listed three properties this year and was able to rent all three above
market value within 48 hours.

“Rentals, you can’t keep them,” Satawake said.

Satawake said tight lending standards have contributed to the
demand for rentals because some borrowers who would be interested in
buying a home are not able to get the financing.

Tight lending standards could also be contributing to less turnover
in the apartment sector.

“The churn traditionally seen in the resident base just isn’t there
at this point,” Willet said, adding “very few households are exiting the
apartment sector to make first-time home purchases.”

There might also be other social demographics that are contributing
to the demand in housing.

Willet said while the employment situation in the U.S. remains
tough, young people — who typically rent — are capturing a
disproportionate amount of the jobs.

“Some who previously went home to live with mom and dad or doubled
up into roommate living arrangements are now forming their own
households,” Willet said.

Khan also suggested older generations now consider renting as a
more appealing alternative to buying.

“You even have some baby boom generation that are considering that
their large homes are not as necessary as they thought they once would
be,” Khan said.

“They are looking to downsize and potentially move into apartments
and rent,” Khan added.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,M$$AG$,MAUDS$]

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