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Reuters: – Fed’s Evans sees ‘high probability’ of bond-buying through fall. – The US Federal Reserve is likely to need to keep buying bonds through the fall of this year, though the labor market may have improved enough to permit it to begin to trim its purchases by the end of the year, a top Fed official said on Tuesday.
Investment News: Doubleline is set to launch another closed-end fund. – DoubleLine Capital LP is expected to launch its second closed-end fund this month, and expectations are running high for its initial public offering.
Reuters: – Fed should rethink exit plan ‘a little bit,’ Evans says. – The US Federal Reserve should rethink its plan to exit from its super-accommodative monetary policy “a little bit”, a top Fed official said on Tuesday.
Learn Bonds: – Japan’s new 2% inflation target: Why it’s smart and how it matters to you. – It was very wise of Japan to move to a 2% (per year) inflation target and become more aggressive in meeting its inflation objective. “Aggressive” includes aiming to achieve 2% “at the earliest possible time, with a time horizon of about two years”. Japan will derive a net benefit from the move. Also, Japan’s move significantly changed the investing landscape, particularly for yen-denominated fixed-income investments.
WSJ: – What Fed officials are saying about winding down bond purchases. – Tapering is all the rage these days when it comes to the Federal Reserve’s unconventional $85 billion-a-month bond-buying programs. Minutes from the Fed’s latest policy meeting in March showed a robust internal debate about exactly when the Fed should begin to gradually reduce the amounts of its monthly purchases of Treasury debt and mortgage-backed securities. But it’s clear a consensus has emerged that the central bank will indeed reduce the pace of its monthly purchases before stopping the programs altogether.
Reuters: – Fed’s Evans optimistic 2013 is turning point for US economy. – The Federal Reserve’s super-easy monetary policy is giving the US economy the boost it needs to pull free from the effects of the worst recession in decades, a top Fed official said on Tuesday.
Cate Long: – Muniland has a disclosure problem. – There is a glaring gap in regulation – called Regulation Fair Disclosure – when it comes to protecting municipal bond investors. It appears that issuers may be in the habit of giving material nonpublic information to preferred institutional investors, while making retail and non-preferred investors sit out in the cold.
Bloomberg: – China’s Treasury holdings rise to 15-month high as Japan sells. – China, the largest foreign lender to the U.S. government, boosted its holdings of Treasuries in February to the most in 15 months, while No. 2 Japan sold the debt for a fourth-consecutive month.
About.com: – Bond funds ranked 4- and 5-Stars by Morningstar. – Morningstar rankings aren’t perfect, but they provide an excellent starting point for further research into the best mutual funds. Morningstar ranks each fund within its category, giving five stars to the top 10% of funds, four stars to the next 22.5%, three stars to the middle 22.5%, two to the next 22.5%, and one star to the bottom 10%. Keep in mind, this is based on past performance and is not an indicator of future results. That’s why research into the objective and holdings of a fund – and not just investing on the basis of stars – is essential.
Bond Vigilantes: – The effect of globalisation on corporate bond valuations. – Corporate bonds have had an incredible run over the past few years. A combination of sub-par growth, the sovereign crisis in Europe and massive amounts of QE on a global scale has driven government bond yields down to historically low levels. At the same time, corporate bond spreads have tightened significantly from the crazy levels we saw in 2009. This has meant double-digit annualised returns from parts of the investment grade market, albeit with some spread volatility in ‘risk-off’ periods.
Barron’s: – TXU’s beleaguered bonds fall further on restructuring news. – Here’s the least-surprising news to anybody who’s been following leveraged finance over the past half-decade: Energy Future Holdings is considering a Chapter 11 bankruptcy filing, as the company in a regulatory filing late Monday confirmed it’s had discussions with creditors about how to restructure $32 billion in debt. Yes, that’s billion, with a B.
WSJ: – Electronic bond trading steps to fore. – The evolution of bond trading from the telephone to electronic venues is gaining speed. The Securities and Exchange Commission is hosting a meeting Tuesday in Washington for some of the largest firms and trading-platform providers in the $9 trillion corporate-bond market.
Investment News: Muni exemption could hurt taxpayers. – For all of the consternation around the “fiscal cliff” and the sequestration, the path remains unclear for an agreeable way to address the federal budget deficit with additional revenue, further spending cuts, or both. And part of this uncertainty extends to the proposals to cap the tax exemption on municipal bonds as a method of generating additional revenue from the highest income brackets without further burdening people in the lower income brackets.
Barron’s: – Plosser: Fed should get back to old, pre-QE ways. – Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said in a speech Tuesday that the Fed ought to shrink its balance sheet, exit the bond-buying business and go back to the old days when it used the federal funds rate as its main policy tool.
Investorplace: – Hot “Bonds” for your portfolio. – This week we’re picking up on research from my trusted colleague, Vedran Vuk. He’s been the brains behind the picks at Money Forever and wanted to share with readers some ideas on investing in bonds; especially important information for investors looking for yield.
Reuters: – Some cities ditch Build America Bonds as sequester hits stimulus. – Monona, Wisconsin, took a step on Monday that would have been unthinkable just a year ago: it refunded $7.67 million of taxable Build America Bonds in the U.S. municipal market.
Edelman Financial : "End of the day consumers are being lied to. Yields on bond are negotiable. Client could shop around and get better."
— Cate Long (@cate_long) April 16, 2013
Bonds have reversed all of yesterday's muted gains. Treasury yields back to Friday levels but still low end of trading range.
— AnthonyValeri (@Anthony_Valeri) April 16, 2013