Dave Lutz of Stifel, Nicolaus passes along the big stories that traders are chatting about today.
Here’s some of the big ones.
Chinese manufacturing activity slipped to its lowest level in six months, with indications of slowing growth for the quarter to come in the world’s second-largest economy – The National Bureau of Statistics said its purchasing managers’ index (PMI) for January slipped to 50.5, a reading just above the threshold for quickening growth. While output was still expanding, a sub-index for new export orders hovered for the second month below the midpoint, indicating slowing growth, and pointing to a lull in factory operations for the next few months (FT)
Japan is on course to break a pledge to balance its budget by 2020, according to a new government forecast that sets up a battle between fiscal hawks at the ministry of finance and doves in the cabinet of Prime Minister Shinzo Abe – Private sector economists have long seen as ambitious the government’s goal of erasing its primary deficit — the gap between revenues and expenditure, excluding debt payments and bond issuance. (FT)
Developing nations have been forced to sell Treasuries and use the proceeds to arrest domestic currency weakness, driving a drop in their custody holdings at the Federal Reserve – Official holdings dropped by $US21 billion in the week to Jan. 29, the biggest decline since the period to June 26, Fed data show. (Bloomberg)
Euro-area government bonds rallied as slowing inflation boosted speculation that the European Central Bank will take more measures to stimulate the economy – German 30-year bunds rose for a fourth week, the longest run since April, before the ECB meets next week to set monetary policy, having lowered the main refinancing rate to a record 0.25 per cent in November. (Bloomberg)
Republican Leader Sees Senate Raising Debt Limit Without Strings (Bloomberg)
President Barack Obama is running out of reasons to say no to Keystone XL, the proposed oil pipeline that’s long been looming over his environmental legacy – Five years after the pipeline’s backers first asked the Obama administration for approval, the project remains in limbo, stuck in a complex regulatory process that has enabled Obama to put off what will inevitably be a politically explosive decision. But the release Friday of a long-awaited government report removes a major excuse for delay, ramping up pressure on the president to make a call. (AP)
Jos. A. Bank Clothiers is in talks to buy fellow apparel retailer Eddie Bauer, according to people familiar with the matter. If consummated, the deal would dramatically shake up a takeover battle Jos. A. Bank has been waging with Men’s Wearhouse (WSJ)
Turkey’s problems extend past bond purchases and interest rates to questions about the stability of Prime Minister Recep Tayyip Erdogan’s government (NYT)