Friday February 17 2017 Housing and Economic stories

TOP STORIES:            

Bookmakers’ Odds of a Le Pen Victory Surge to 1-in-3: Chart - (www.bloomberg.com) National Front leader Marine Le Pen’s odds of securing an upset in the French presidential race have climbed to 33 percent, according to bookmakers, from 25 percent at the end of January. That echoes opinion polls showing the far-right candidate gaining on front-runner Emmanuel Macron, even while they still favor Macron to win the May 7 runoff. The uptick in the implied probability of a Le Pen victory is one of the reasons investors are demanding a higher premium for holding French bonds over similar-maturity German debt.

Biggest EU Banks Embark on the Mother of All Debt Binges - (www.wolfstreet.com) Spain’s three biggest banks, Banco Santander, BBVA and Caixa Bank, have got off to a flying start this year having issued €8.6 billion in new debt, seven times the amount they sold during the same period of last year. The last time they rolled out so much debt so quickly was in 2007, the year that Spain’s spectacular real estate bubble reached its climactic peak. Santander accounts for well over half of the new debt issued, with €5.12 billion of senior bonds, subordinate bonds, and a newfangled class of bail-in-able debt with the name of “senior non-preferred bonds” (A.K.A. senior junior, senior subordinated or Tier 3) that we covered in some detail just before Christmas.

Credit Suisse Announces Another 6,500 Layoffs After Reporting 2016 Loss – (www.zerohedge.com) After Credit Suisse reported yet another significant loss for the full year 2016, amounting to 2.35 billion Swiss francs, more than the CHF2.07bn expected, the Swiss banking giant said it was looking to lay off up to 6,500 workers and said it was examining alternatives to a planned stock market listing of its Swiss business. "We're setting a target now of between 5,500 and 6,500 for 2017," Chief Financial Officer David Mathers said in a call with analysts on Tuesday after the bank published earnings. The bank did not specify where the extra cuts would come but said this would include contractors, consultants and staff, Reuters reported.

No Laughing Matter for Kuroda With BOJ Near 40% of Bond Market - (www.bloomberg.com) Governor Haruhiko Kuroda once chuckled that the Bank of Japan had only gobbled up half as much in government bonds as the Bank of England once did. It soon won’t be a laughing matter. The BOJ holds more than 40 percent of Japanese government bonds, according to data compiled by Bloomberg. While its holdings of all Japanese sovereign securities -- including bonds and bills together -- are still shy of the yardstick that Kuroda mentioned with some levity in October 2014, the central bank’s stake continues to rise and rise.

China’s Zombie Province Shows Trouble With Its Bond Market - (www.bloomberg.com) Nowhere are China’s rusted-out industries worse than in Liaoning, a province that’s slumped into outright recession and where officials have admitted to years of inflating fiscal revenue data. Liaoning is also a showcase for how long a road China faces to create a world-class bond market. For all its problems, the district pays little more than its peers to borrow. On the corporate side, authorities’ reluctance to let more insolvent enterprises go under means a limited role for the market, with financiers willing to restructure their debts on the sidelines.

OTHER STORIES:

Asia Stocks Rally Loses Momentum While Bonds Drop: Markets Wrap - (www.bloomberg.com)
China’s Factory Prices Rise a Fifth Month, Bolstering Reflation - (www.bloomberg.com)
No Laughing Matter for Kuroda With BOJ Near 40% of Bond Market - (www.bloomberg.com)

S&P tops $20 trillion as 'Trump trade' roars back to life  - (www.reuters.com)
U.S. Consumer Inflation Expectations at 19-Month High, Fed Says - (www.bloomberg.com)
Greek Central Bank Chief Warns Bailout Delay Risks Rerun of 2015 - (www.bloomberg.com)