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To: Jim Willie CB who wrote (4258)	4/30/2003 6:05:55 PM
From: re3	Read Replies (1) \| Respond to of 5423

JPMorganna less than a point away from 30 ! should i buy a put ? -g-

To: Jim Willie CB who wrote (4258)	5/1/2003 9:29:57 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

US to issue a record $58bn of debt By Jenny Wiggins in New York, Paivi Munter in London and Barney Jopson in Tokyo Published: April 30 2003 12:28 The US Treasury said Wednesday it would issue a record $58bn in debt this quarter to combat a rising budget deficit, but bond investors shrugged this aside and Treasury prices rose sharply on fears over the economy. Market estimates for the 2003 budget deficit range from $350bn to $450bn, almost $150bn higher than the start of the fiscal year and the shortfall is thought to increase next year. "Most expect that the budget situation will deteriorate further in 2004," the Treasury's borrowing advisory committee said. The Treasury is reintroducing the three-year note this quarter after suspending it in 1998. It will auction $22bn in three-year notes, $18bn of 5-year notes and $18bn in 10-year notes next week. The Treasury has decided to hold more auctions rather than dramatically increasing their size. Next quarter, it will start selling 5-year notes on a monthly basis and issue 10-year notes more often. "This gives [the Treasury] tremendous flexibility to handle any of the wide range of budget outcomes that may occur," said Stephen Stanley, senior market economist at RBS Greenwich Capital. Treasury inflation-indexed securities (TIIS) will also be sold more often in response to increased demand. Treasury prices were higher on Wednesday as an influential manufacturing report showed activity weakened more than expected in April, and Federal Reserve chairman Alan Greenspan warned "lingering business caution" could impede economic performance. By late afternoon in New York, the 10-year Treasury note gained 11/16 to 99 31/32 to yield 3.845 per cent while the 30-year bond rose 15/32 at 106 5/16 to yield 4.769 per cent. The two-year note was 7/32 higher at 100 7/32 to yield 1.493 per cent. UK gilt prices recovered in late trade, defying the pound's fall to a four-year low against the euro. Investors turned more bond-friendly as the London stock market dipped just before the close. Earlier, gilts had come under pressure from comments by Chancellor of the Exchequer Gordon Brown, defending his bullish growth forecasts for the next couple of years. Two-year gilt yields fell 4 basis points to 3.303 per cent, while 10-year yields declined 2bp to 4.350 per cent. Gains for eurozone bond prices increased toward the close, thanks to weak US manufacturing numbers. But trading volumes were meagre ahead of May Day. Further support for eurozone bonds came from France, where the unemployment rate rose to 9.3 per cent in April from 9.2 per cent in the previous month. Two-year schatz yields fell 5.5 basis points to 2.437 per cent, while 10-year yields eased 4.4bp to 4.100 per cent. Japanese government bond prices ended unchanged despite the Bank of Japan's decision to ease monetary policy further. Following a public holiday on Tuesday, the yield on the benchmark 10-year JGB was steady at 0.605 per cent, with the price at 100.885. The Bank of Japan's policy board announced that it would increase its target for the balance of current account deposits it holds, its first monetary easing measure since October last year. Analysts, however, said the market's limp reaction demonstrated that investors did not expect such measures to help Japan break out of the economic slump that has caused money to flood into the bond market. news.ft.com

To: Jim Willie CB who wrote (4258)	5/1/2003 9:33:18 AM
From: 4figureau	Read Replies (3) \| Respond to of 5423

Bank of Japan eases monetary policy By David Pilling in Tokyo Published: April 30 2003 9:33 \| Last Updated: April 30 2003 10:12 The Bank of Japan on Wednesday surprised markets by easing monetary policy sharply, citing uncertainty in Japan's financial markets and the possible negative impact on the economy of the Sars crisis. The central bank said it would raise the target for current accounts held at the central bank to ¥22,000bn-¥27,000bn ($184bn-$225bn), from the previous level of ¥17,000bn-¥22,000bn. Under the bank's quantitative easing policy, begun in March 2001, the BoJ has flooded the market with enough liquidity to drive interest rates down to virtually zero. Because of "uncertainty regarding the economic and financial situation, the bank thought it appropriate to raise the target balance of current accounts held at the bank to maintain financial market stability, thereby strengthening support for economic recovery," the BoJ said in a statement. Analysts said the announcement showed that Toshihiko Fukui, who became BoJ governor in March, was willing to be more aggressive than his predecessor, Masaru Hayami. In his short time at the helm, Mr Fukui has called an unprecedented emergency meeting, raised the amount of shares the BoJ can buy from banks and initiated a scheme for the bank to buy asset-backed securities from small and medium companies. Even so, Mamoru Yamazaki, chief economist at Barclays Capital, said the policy moves would have almost no effect on the real economy or on prices, which have been falling for seven years. He said the supply of more liquidity would, however, reassure the edgy financial markets, which have been battered by a sharply falling stock market. On Wednesday, the Nikkei average responded to the news by rising 2.9 per cent to 7,831.4. Bank shares, which have been battered recently, rallied sharply. Of the big four, Mizuho rose 8.5 per cent, UFJ 11.6 per cent, Sumitomo Mitsui Financial Group 14 per cent and Mitsubishi Tokyo Financial Group 14.1 per cent. The BoJ also signalled its intention to help in the workout of bad loans, which have paralysed the banks, by treating loans to the Industrial Revitalisation Corporation (IRC) as collateral in its money market operations. The IRC, which begins business next month, is due to buy up to ¥10,000bn of loans owed by weak, but salvageable, companies in an effort to get them off banks' books and clear them through the market. The BoJ has long argued that its monetary policy cannot work properly unless commercial banks are restored to health, allowing them to fulfil their function of multiplying base money into credit. Risk averse-banks have been slashing their loan books in an attempt to bolster their precarious capital-adequacy ratios, causing bank lending to fall for more than 60 straight months. Mr Yamazaki said that, until bad loans had worked through the system, BoJ policy was likely to prove impotent in terms of reversing deflation. Only if the government asked the bank to directly fund more spending could the price fall be halted he said. "Without such a big policy change, it's very difficult to alter the current price situation." news.ft.com