8th July 2013
1) US jobs data brought good news on Friday with 195,000 jobs added but the rate was unchanged as it appears the participation rate – those looking for work rose – so unemployment sticks at 7.6 per cent. This has implications for interest rates and QE because the Fed is targeting 6.5% with its policies. As you were, perhaps.
2) S&P downgrades Barclays, Credit Suisse and Deutsche bank mostly due to Europe’s flagging economic fortunes as Fox Business reports.
3) We have learned a bit more about the new Bank of England governor Mark Carney. He will give forward guidance which may bring more stability and he hopes, more confidence. Incidentally it looks like there will be more explanations about what Carney is doing on the website (well before we get the MPC minutes). But as Henderson’s Simon Ward pointed out last week, we don’t yet know how relations with the other MPC members will work out and the committee requires a majority of the nine members to change rates so it is not a one man show.
5) Some fund managers are concerned that ETFs are exacerbating market swings particularly in fixed income as Investment Week reports. But of course it affects all investors no matter how they access these markets.
5) To understand the scale of the movements, the world’s largest bond fund manager Pimco saw $9.9bn of outflows in June. Not small beer.