Author: FX_Trdr

The ECB kept the interest rate unchanged and announced the plan to purchase sovereign bond through the new program called Outright Monetary Transactions or OMT. It also decided to eliminate credit rating threshold on all debt issued or guaranteed by the central governments in the euro area with the exception of Greece. Similar securities denominated in USD, GBP and YEN will also qualify. Effectively it’s saying that banks don’t have to worry about further downgrades on sovereigns in the euro area and they can use their holdings to US Treasuries, Gilts and JGBs to borrow from the ECB. Overall market reacted very positively even though what came out was largely in line with expectation. Spanish and Italian government bond yields edged slightly lower. Euro Stoxx popped 3.4%, the CAC 40 gained 3.06% and the DAX finished up 2.91%. Here in the US, treasuries fell and the S&P 500 reached the best level since Jan 2008. twitter @FNNOnline or check us out at our website at fnno.com.

The ECB announced its new sovereign bond purchase program called Outright Monetary Transactions or OTM and will buy 1 to 3yr government bonds in the secondary market. The EU Treaty prevents ECB from purchasing government bonds in the primary market, but Article 18 allows it to do so in the secondary market as a tool for monetary policy. Countries who qualify for this program must accept the conditions come with the European Financial Stability Facility/European Stability Mechanism program. Countries will also need to sign a memorandum of understanding on the macroeconomic adjustments. There is no upper limit on quantity and government bonds of Greece, Portugal and Ireland will be qualified once these countries regain their bond market access. ECB will not claim senior creditor status on purchases associated with the OMT and will publish the market value of its holdings on weekly basis. The only thing that wasn’t specified is whether the maximum 3yr tenor is the original or the remaining time to maturity. In other words, we don’t know if ECB will buy something like a 10yr bond that matures in 2015. We will be following this for you, meanwhile please share with us your reaction.

The United States has come upon a milestone, but it’s not a happy one. The national debt reached $16 trillion dollars on Tuesday. This new figure is 104% of the United States gross domestic product, and the debt continues to grow at an average of $2 million a minute. According to Fox News, the primary holders of the United States’ Debt are American investors and future retirees, bearing two-thirds of the bill. China, our greatest foreign debt holder, accounts for only 8% of the total debt. For more news and analysis follow us on twitter @fnnonline or check out our website at fnno.com.

The Daily Ticker’s Aaron Task interviews John Challenger about the labor market

The fast food company best known for its Big Mac hamburger is going to open restaurants that feature no meat at all. McDonald’s Corp. is planning to open two vegetarian restaurants in India in 2013. The two new restaurants are located in Sikh and Hindu pilgrimage sites where customers are very likely to abide by traditional religious diets. It is important for McDonald’s to have a large presence in the world’s second most populous country, and changing its menu will allow it wider appeal in the region.The fast-food chain has modified its ingredients by region before, barring beef and pork in areas where the the population is predominantly Muslim and Hindu. The new vegetarian locations will offer meals like potato sandwiches as opposed to meat based food.

As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy — they expect to make money. So let’s look at two noteworthy recent insider buys.

FedEX Corp. (NYSE: FDX) is down over 3% in pre-market trading today after the shipping and delivery company projected its first quarterly earnings decline in nearly three years. The company forecasted a quarterly profit of $1.37 to $1.43, down from a June 19th forecast of $1.45 to $1.60. FedEx’s earnings decline is likely due to a lack of demand for express packages, which provide most of the company’s sales.

In trading on Thursday, education & training services shares were relative leaders, up on the day by about 3.6%. Leading the group were shares of Career Education (CECO), up about 9.9% and shares of Education Management (EDMC) up about 7.1% on the day.

Capital One Financial Corp (NYSE:COF) is down over 1% to $55.74 in pre-market trading, after the announcement that ING Groep will sell its stake of more than 9% in the company The public offering will come in around 54 million shares. Capital One bought ING Direct USA back in February for $9.1 billion in cash and stock, making ING the largest shareholder of the company. As of yesterday, ING’s stake in Capital One was valued at around $3 billion.

Ford Motor Co. has announced a recall of its 2013 Ford Escape over fears of fire risk. According to Reuters, the recall concerns a component in the car called the cup plug, which could cause car engines to catch on fire. The same source says that this is the third recall of the 2013 Escape and it affects close to 7,600 cars. The vehicles in question are 1.6 liter model escapes built between the dates of October 5, 2011 and August 31, 2012. According to The Detroit News, no fires have been reported by customers as of yet, but there has been at least one case of fire at a dealership. For more news and analysis, follow us on twitter @fnnonline,