Treasury Yields at Almost 15-Year High Versus Bunds

A gauge of expectations for consumer prices over 10 years climbed to the highest in five months before Federal Reserve officials including Fed Bank of Philadelphia President Charles Plosser speak this week with markets indicating about a 60 percent chance interest rates will rise by July next year. European Central Bank President Mario Draghi signaled rates will probably remain low for at least 2 1/2 years.

“That Treasuries are still trading so cheap relative to what you can get in Europe continues to keep U.S. debt so well bid, especially when you factor in the lack of growth or inflation pressures,” said Thomas Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. “The major question this week will be how well the auctions go will after last week’s Federal Open Market Committee meeting.”

The gap will widen to 137 basis points by the end of this year, according to the weighted average of analyst estimates compiled by Bloomberg.

Government data due on June 26 will show the Fed’s preferred measure of inflation rose to the highest since October 2012, analysts said.

The Fed’s 2 percent inflation goal is based on the personal consumption expenditures price index, which rose 1.8 percent last month from a year earlier, according to the median estimate of economists and strategists in a Bloomberg survey before the data on June 26. That’s after a 1.6 percent gain in April.

In the past 13 months, the gap between yields of two- and five-year Treasuries has doubled to 1.22 percentage points, according to data compiled by Bloomberg. At the same time, the difference between those of five- and 30-year securities has narrowed to the least since 2009 as the long bond rallied.

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Global advertising to expand this year helped by World Cup

The world’s largest advertising groups such as Martin Sorrell’s WPP, second-place Omnicom and third-placed Publicis often post growth rates correlated with global gross domestic product. They are set to benefit this year as the United States – the largest ad market followed by Japan and China – is expected to grow steadily.

Zenith said the total amount of media spend will reach up to $524 billion at year end, driven by an improved global economic outlook and the rapid rise of mobile advertising.

The Publicis-owned forecasting unit shaved 0.1 percent off an earlier prediction for the year after political tumult in Ukraine damaged the local economy.

“Growth will continue to improve over the next two years, reaching 5.7 percent in 2015 and 6.1 percent in 2016, driven by continued economic recovery, including, at last, the Eurozone,” said Zenith Optimedia in a statement.

Despite an uptick during the World Cup in June and July, the forecasters also said that television’s share of global advertising spending would peak this year after rising steadily for decades from 29.9 percent in 1980 to 39.6 percent in 2013.

Behind the shift lies the rapid growth of Internet advertising, which is growing 16 percent a year compared to 4 percent for television. Major companies from auto makers to consumer products now see on-line ads as being suitable for brand building much as television once was.

Television’s share of ad spend will erode to 39.4 percent this year and 38.3 percent by 2016, according to Zenith.

Publicis shares are down 5.1 percent this year, while WPP’s and Omnicom’s are both down 5.6 percent.

(Reporting by Leila Abboud; Editing by Stephen Powell)

One Small Step for Immigration Reform

By Peter Muller for Roll Call

The United States is facing a growing skills deficit. Leading American technology companies have job openings for engineers and scientists, but not enough experts to fill them. In the long term, governments and companies like Intel are tackling this issue with investments in science, technology, engineering and mathematics education. Securing America’s long-term prosperity will require a national commitment to encouraging and supporting more U.S. students to pursue these fields as a career.

Today, high-skilled immigration programs like H-1B visas are helping fill the gap, keeping America’s innovation engine running. Talented people from around the world come to the United States, lending their expertise and skills to America’s most innovative companies, helping develop incredible technologies, create new jobs and drive economic growth.

But, like the broader immigration system, there are serious issues that need to be addressed. The arbitrary cap on H-1B visas is hurting our economy. According to a study conducted by Compete America, a coalition of companies, universities and trade associations that advocates for reform of the high-skilled immigration system, the artificially low cap on H-1B visas in 2013 resulted in 100,000 fewer jobs being filled directly and another 400,000 that would have been indirectly created.

As a result, financial and professional need has forced both of these talented people to seriously consider leaving the country, taking their years of training and experience elsewhere.

Unfortunately, their story is not unique and it represents only one of the many problems in our immigration system. Congressional action is needed to address the significant immigration challenges we face and are wrestling with as a nation. However, there are small steps we can take today to invest in our economy and improve the lives of our talented colleagues.

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World Bank Supports a Reform at Finance Ministry of Lebanon

The World Bank Tuesday approved a $5.2 million loan to support Lebanon’s Finance Ministry in fiscal policy and debt management as part of the Second Financial Management Reform Project. The project aims to enhance the efficiency of financial management systems and promote effective use of public resources in Lebanon, the World Bank said in a statement.

Read more: http://www.dailystar.com.lb/Business/Lebanon/2014/Apr-16/253441-world-bank-supporting-reform-at-finance-ministry.ashx#ixzz2z6011Fui (The Daily Star :: Lebanon News :: http://www.dailystar.com.lb)