[US] Treasuries Proving Safer Than AAA Two Years After S&P Cut
Aug 5, 2013 6:49 AM PT By Susanne Walker & John Detrixhe – bloomberg
The gap between Treasury five- and 10-year note yields is wider than that for the higher-rated sovereigns, showing fixed-income investors anticipate the U.S. will grow faster than its peers, according to data compiled by Bloomberg. Other measures also show the U.S. improving, as the cost to insure against default is the lowest since 2009, the dollar has risen the most since 2008 and the S&P 500 Index reached a record on Aug. 2.
Investors have rejected the notion that the U.S. is less creditworthy with gross domestic product forecast to grow 2.7 percent in 2014, the fastest of any Group of 10 nation, surveys of economists by Bloomberg News show, while the budget deficit is the least since 2008. While an S&P managing director said in March that other credit raters would “catch up” to its downgrade, the firm and Moody’s Investors Service have since changed their outlooks to “stable” from “negative.”
“The U.S. is really leading the way in the developed world for recovery,” Kathleen Gaffney, a money manager in Boston for Eaton Vance Corp., which oversees $261 billion, said Aug. 2 in a telephone interview. “We’re at an important inflection point where the economy really has the potential to pick up some steam.”
Trade Gap in U.S. Narrows to Lowest Level Since October 2009
Aug 6, 2013 6:01 AM PT By Lorraine Woellert – bloomberg
The U.S. trade deficit narrowed more than forecast in June to the lowest level since October 2009 as crude oil imports declined and American companies shipped more goods abroad.
The gap shrank 22.4 percent to $34.2 billion from a revised $44.1 billion in May that was smaller than previously estimated, the Commerce Department reported today in Washington. The median forecast in a Bloomberg survey of 72 economists called for a $43.5 billion deficit. Exports increased to an all-time high while imports fell to a three-month low.
The smaller trade bill, which reflected increased U.S. shipments of capital goods and petroleum, shows second-quarter growth was stronger than initially estimated. At the same time, a projected pickup in consumer and corporate demand indicates it may be difficult for the deficit to improve further.
“This is exceptionally good news,” said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York, whose forecast matched the Bloomberg survey median. “This could suggest GDP could be increased by as much as 1 percent.” Still, the level of the trade deficit is “unlikely to be sustained given the weak global growth.”
Find out more about President Obama’s Economic Plans: http://www.whitehouse.gov/economy