“Any idiot can face a crisis – it’s day to day living that wears you out.” – Anton Chekhov

1. Fed could cut bond-buying even further — Jon Hilsenrath from WSJ, reported that the Federal Reserve could reduce its monthly bond purchases to $65B from $75B at a next FOMC meeting. The Fed cut $10B from the QE program in December. Despite a weak jobs report last month, policy makers still bullish about the U.S.’s economic prospects.
2. Bank of Japan keeps ultra-loose policy unchanged — as expected, the Bank of Japan has left its key interest rate at 0.1%, and maintained its program of expanding the monetary base by ¥60-70T a year. The BOJ expects the economy to continue recovering moderately, although it will be affected by an upcoming hike in sales tax.
3. China (FXI) factory contraction shows weak start for economy in 2014 — Reuters, activity in China’s factory sector contracted in January for the first time in six months. It points to a weak start for the economy in 2014 as policymakers seek to curb high debt levels to head off financial risks. The flash Markit/HSBC Purchasing Managers’ Index (PM) fell to 49.6 in January from December’s final reading of 50.5, dropping below the 50 line which separates expansion of activity from contraction.
4. U.S. has until late February to increase debt limit — Congress has until late February to lift the $16.7T debt ceiling and avert a U.S. default, Treasury Secretary Jacob Lew stated. The cap is suspended until February 7, after which the Treasury can juggle the money about for a bit before running out of cash.
5. China’s Industrial & Commercial Bank of China Ltd concern of a default — Bloomberg, Chinese investors were asked to sink at least 3 million yuan ($496,000) in the 3 billion-yuan Credit Equals Gold No. 1 product amid guarantees that it was “100 percent safe,”. However, the owner was arrested after its coal mining company that collapsed.
6. Emerging-market currencies deepen drop — Marketwatch, Emerging-market currencies such as the Turkish lira, South African rand, Argentina Peso fell further against the dollar. Also, worries about a Chinese slowdown and prospects of rising U.S. rates triggered a broad flight out of emerging-markets assets.

The week ahead — Economic data from Econoday.com:

This entry was posted on Monday, January 27th, 2014 at 12:02 pm and is filed under Weekly Summary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.