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Livesquawk - Closing Wrap - Thursday 25.02
Closing Wrap - Thursday 25.02
Headlines
  • Fed Flashes $1 Tln Warning For Businesses Hit By Covid-19
  • Fed’s Quarles Cautions Pandemic Stimulus Could Obscure Risks For Banks
  • Fed’s Bostic Says Labor Market Crisis, Not GDP, Is Focus Of Fed
  • Fed's Williams: GDP Growth This Year Could Be Strongest In Decades
  • EU Leaders Vent Fears Over Delays To Vaccination Drive
  • HP Inc. Tops Q1 EPS By 26c, Offers Q2 And FY Guidance
  • Moderna Expects $18.4 Bln In COVID-19 Vaccine Sales In 2021
  • Best Buy Signals Slowing Sales Of Work-From-Home Electronics
  • Twitter Sees Revenue Doubling In 2023, Shares Hit Record High
  • GameStop Shares Soars Around 50% As 'Meme Stocks' Rally Again
  • Boeing Moved To Replace 777 Engine Covers Before Recent Failures
Commentary
PCE Inflation Set To Slip, Rise Likely Later In 2021

Economists say the US Federal Reserve’s preferred measure of consumer price growth will likely show a decline in January on the back of softer headline US inflation, but household costs are widely expected to increase as the year progresses.

 

The January rate of annual core PCE inflation is expected to ease to 1.4% from 1.5% in the previous month, economists said. The US Labor Department reported earlier this month that its core inflation rate fell to 1.4% from 1.6% in December.

 

Economists forecast a monthly core PCE rate of 0.2% versus the 0.3% growth in the final month of 2020.

 

Not everyone expects January to show a reduction in PCE inflation. TD Securities said it sees the monthly rate holding at December’s level of 0.3%.  “A surge in spending has been signalled by the retail sales data. Income likely rose even more than spending, lifted by stimulus payments. Core PCE inflation appears to have been relatively strong as well, mainly due to an adjustment to Medicare payment rates and an equity-market-related surge in portfolio management fees.” (LiveSquawk – Continue Reading)

Eurozone Money Growth Remains Strong, Mostly Driven By Governments

Weaker bank lending in January, deposit inflows remain strong

January eurozone net bank lending to households weakened on the back of weaker mortgage lending. So far, mortgage lending has remained remarkably resilient, so we will be watching mortgage demand closely in the months ahead. Spain stands out, as net lending to households there turned negative in December driven by high redemptions. Redemptions are not yet in for January, but net lending figures suggest this trend has continued. Germany, France and Italy all saw weaker but still positive net lending to households.

 

Net bank lending to eurozone businesses was weak too in January. France maintained positive momentum, while Germany and Belgium continue to hover around zero net lending. The positive momentum weakened in Italy, while Spain drifted further below zero. The Netherlands saw a sharp dip into negative territory in January. (ING – Continue Reading)

US Bank Regulators Say Pandemic Drove Up Risk In Leveraged Lending

The credit risk for large, syndicated loans, including leveraged loans, remains high and increased in 2020 as the COVID-19 pandemic took an economic toll, U.S. bank regulators cautioned on Thursday.

 

A new regulatory report found that the level of “non-pass” loans nearly doubled in 2020, rising to 12.4% from 6.9%, with most of those riskier loans held by nonbanks. U.S. banks accounted for 45% of the $5.1 trillion in large, syndicated loans but held less than 25% of all non-pass loans.

 

The report found loan performance particularly struggled in areas affected by the pandemic such as retail and transportation. The rate of “non-pass” loans, which regulators identify as loans that pose a greater risk of not being repaid, rose to 29.2% from 13.5% in those industries in 2020. (Reuters – Continue Reading)

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