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12:32 AM EST
* Feb exports -18.1 pct yr/yr, vs f'cast of +6.8 pct. * Feb imports +10.1 pct yr/yr, vs f'cast of +8 pct. * Feb trade balance -$23 bln, vs f'cast of +$14.5 bln. * Weak trade data could put downward pressure on economy. By Kevin Yao and Adam Rose.
BY Market News Intl Fixed Income Bullets
03/07/14 10:59 PM EST
CHINA DATA: Exports plunged 18.1% y/y in February, badly missing expectations for a 4.0% gain, and seeing the biggest percentage drop since -23.4% in August 2009. The plunge in exports meant China saw its first trade deficit since March last year, and the biggest shortfall since February 2012. Data covering the first two months of the year combined painted only a slightly healthier picture, with exports down 1.6% y/y and imports up 10%, resulting in a trade surplus of $8.89 billion, down 79.1% y/y. Customs Administration said the Chinese New Year inflated the trade deficit because Chinese companies typically front-load exports before the holiday. The sharp fall in the value of the yuan in February also appears to have hurt the export numbers and flattered import numbers. The sharp deterioration in the February data suggests that moves by the authorities to squeeze speculators via the exchange rate may have crimped this trade and led to capital outflows. Despite the noise, the February trade report is yet more evidence that Chinese economic activity has slowed at the start of 2014.
BY DJ Business News
03/07/14 09:59 PM EST
China's exports unexpectedly fell 18.1% in February from a year earlier, leaving a trade deficit of $22.98 billion for the month, data from the General Administration of Customs showed Saturday. The export tally compared with January's 10.6% rise and was far worse than the median forecast of economists calling for a 5% expansion. Imports rose 10.1% from a year earlier, up marginally from a 10% rise in January and beating the median forecast of a 7.1% increase.
BY SourceMedia Bond Buyer
03/07/14 07:07 PM EST
Federal Reserve Bank of New York President William C. Dudley said he sees a "reasonably favorable" outlook for the U.S. economy, even as elevated joblessness and too-low inflation warrant a high level of stimulus for a "considerable time." "I would very much prefer faster economic growth and more rapid progress towards our dual mandate objectives of maximum...
BY SourceMedia Bond Buyer
03/07/14 07:07 PM EST
Municipal bonds weakened Friday morning as an economic report showed labor market improvement, which would allow the Federal Reserve to continue winding down its quantitative easing program and support the eventual raising of interest rates. "Clearly the market took this report as a positive for the economy," a fixed-income strategist in St. Louis said in an...
Fidelity Viewpoints® and Analysis
With a new chair, the Fed looks prepared to continue its push to keep rates low.
Bonds are showing signs of strength after a challenging 2013, but expect volatility.
Shorter duration bonds may provide limited price volatility and varying levels of income.
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Fixed Income Products
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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss
The municipal market can be affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities. Interest income generated by municipal bonds is generally expected to be exempt from federal income taxes and, if the bonds are held by an investor resident in the state of issuance, state and local income taxes. Such interest income may be subject to federal and/or state alternative minimum taxes. Investing in municipal bonds for the purpose of generating tax-exempt income may not be appropriate for investors in all tax brackets. Generally, tax-exempt municipal securities are not appropriate holdings for tax advantaged accounts such as IRAs and 401(k)s.
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