Wednesday, 27 Oct 2021

Three-Year Note Auction Attracts Below Average Demand

European Economics Preview: UK Unemployment Data Due

Unemployment from the UK and economic confidence from Germany are due on Tuesday, headlining a light day for the European economic news.

At 2.00 am ET, the Office for National Statistics is scheduled to issue UK unemployment data. The jobless rate is forecast to fall to 4.5 percent in three months to August from 4.6 percent in three months to July.

In the meantime, consumer price data is due from Romania.

At 3.00 am ET, retail sales and industrial production figures are due from Turkey. Economists expect industrial output to grow 10.5 percent annually in August after rising 8.7 percent in July.

At 5.00 am ET, Germany ZEW economic confidence survey results are due. The economic confidence index is seen at 24.0 in October versus 26.5 in September.

U.S. Services Index Indicates Modestly Faster Growth In September

Activity in the U.S. service sector unexpectedly grew at a slightly faster pace in the month of September, according to a report released by the Institute for Supply Management on Tuesday.

The ISM said its services PMI inched up to 61.9 in September from 61.7 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to edge down to 60.0.

“The slight uptick in the rate of expansion in the month of September continued the current period of strong growth for the services sector,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.

He added, “However, ongoing challenges with labor resources, logistics, and materials are affecting the continuity of supply.”

The uptick by the services PMI came as the business activity index climbed to 62.3 in September from 60.1 in August.

The new orders index also inched up to 63.5 in September from 63.2 in August, while the employment index edged down to 53.0 from 53.7.

On the inflation front, the prices index advanced to 77.5 in September from 75.4 in August, indicating an acceleration in the pace of growth.

The ISM released a separate report last Friday showing an unexpected acceleration in the pace of growth in U.S. manufacturing activity in the month of September.

The manufacturing PMI crept up to 61.1 in September from 59.9 in August. The uptick surprised economists, who had expected the index to edge down to 59.6.

Chatham Offers To Acquire R.R. Donnelley & Sons; Shares Jump – Quick Facts

Private investment firm Chatham Asset Management, LLC has announced an offer to acquire all the common stock of R.R. Donnelley & Sons Company (RRD), not already owned by Chatham, at a price equal to $7.50 per share. To facilitate the deal, Chatham is willing to equitize and/or subordinate its entire debt position, reducing RRD’s total debt by 23%. This would result in a decline in annual interest expense of approximately $36 million or 33% on a pro forma basis, Chatham noted.

“We no longer have confidence in RRD’s ability to achieve full and fair value as a public company under the current Board and management team,” said Chatham.

Chatham is the largest bondholder of R.R. Donnelley & Sons Company beneficially owning approximately 14.9% of RRD’s outstanding common stock and 41.4% of the aggregate principal amount of RRD’s outstanding bonds.

Shares of R.R. Donnelley & Sons were up 30% in pre-market trade on Tuesday.

Cochlear To Immediately Begin Controlled Market Release Of Remote Assist In The U.S.

Cochlear Limited has received FDA approval in September for the company’s Cochlear Remote Assist solution in the Nucleus and Baha Systems. Cochlear noted that the FDA approval for the implant solution and FDA clearance for the Baha solution are the first step in commercializing the product offering, anticipated spring 2022.

Cochlear said it will immediately begin a controlled market release of Remote Assist in the U.S. by partnering with hearing healthcare providers and hospitals.

The company expects Remote Assist approval in Canada in late 2021 for the Nucleus System and early 2022 for the Baha System.

Job openings slip, quits rate hits record

Rep. Kevin Brady discusses what the jobs report means

Texas Republican discusses how to get people back to work and improve the economy on ‘Kudlow.’ 

The number of job openings in the U.S. slipped off a record high in August as the quits rate increased to a record high. 

The total number of job openings fell by 659,000 to a seasonally adjusted 10.439 million at the end of August, according to the Labor Department’s Job Opening and Labor Turnover Survey, or JOLTS. The number of job openings in July was revised higher by 164,000 to 11.098 million.

Economists surveyed by Refinitiv were expecting 10.925 million available jobs. 

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This as the quits rate hit a record high 2.9% while total separations were little changed at 6 million. 

This story is developing. Check back for updates.

Avalanche star Nathan MacKinnon in COVID-19 protocol – The Denver Post

Avalanche center Nathan MacKinnon is in COVID-19 protocol and not practicing on Tuesday, a day before the season opener against the visiting Chicago Blackhawks.

Last week, Avs coach Jared Bednar tested positive for COVID-19 and has been in quarantine.

Avs general manager Joe Sakic is scheduled to meet the media at noon.

This report will be updated. 

Three-Year Note Auction Attracts Below Average Demand

The Treasury Department kicked off this week’s series of announcements of the results of its long-term securities auctions on Tuesday, revealing the sale of $58 billion worth of three-year notes attracted below average demand.

The three-year note auction drew a high yield of 0.635 percent and a bid-to-cover ratio of 2.36.

Last month, the Treasury also sold $58 billion worth of three-year notes last month, drawing a high yield of 0.447 percent and a bid-to-cover ratio of 2.45.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous three-year note auctions had an average bid-to-cover ratio of 2.45.

Later today, the Treasury is due to announce the results of this month’s auction of $38 billion worth of ten-year notes, while the results of this month’s auction of $24 billion worth of thirty-year bonds will be announced on Wednesday.

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