Oil
U.S. Trade Deficit With OPEC Widened Further
June 10, 2008
The deficit to OPEC increased 10.5% between March and April and by 67.8% in January-April from a year earlier. The $58.5 billion trade shortfall with OPEC in the first third of 2008 was roughly the same size as the combined deficits with Europe and Japan. 55% of incremental growth in the deficit to OPEC between [...] More
Central Bank Watch
Bank of Canada Fails to Cut Rates
June 10, 2008
The more anti-inflationary tone of all central banks in recent days took another giant step forward when a universally expected 25-basis point rate cut in Canada was not announced. Instead, Bank of Canada officials revised their forecast for total CPI inflation to above 3% later this year. CPI forecasts for 2H08 had previously been pencilled [...] More
New Overnight Developments Abroad - Daily Update
New Developments Abroad
June 10, 2008
Strong overnight gains in the dollar amount to 1.5% against the Swiss franc, 0.9% versus sterling and the euro, 0.7% relative to the C-dollar, and 0.5% against the kiwi and yen. Latest impetus for appreciation came from a speech by Bernanke in which he promised that the Fed will strongly resist any surge in long [...] More
U.K. Economy Getting Worse in a Hurry
June 9, 2008
The sum of Britain’s manufacturing purchasing manager’s index (PMI) in May (50.0) and the sister index for service-producing industries, 49.8, added up to less than 100.0 for the first time since April 2003. Just nine months previously, the sum was 113.9, comprised of 56.1 in manufacturing and 57.8 in services. Since mid-2007, the two most [...] More
Currency Markets in the News
Misery Index Redux
June 9, 2008
The Paris-based Organization for Economic Co-operation and Development has released new semi-annual forecasts of growth and inflation this year and for 2009. For those areas that comprise the G7 — the U.S., Japan, Britain, Canada and the big-3 of Euroland — one can derive a growth/inflation tradeoff index by subtracting the latter from the former. [...] More
Currency Markets in the News
Euroland Growth in the Spotlight
June 9, 2008
Nobody disputes that inflation in Euroland is unacceptable or that short-term prospects for significant improvement are very slim. A wider range of opinions surrounds forecasts about how much economic growth is likely to slow. Officials at the European Central Bank (ECB) are on the optimistic side of the spectrum, cautioning that a steep loss of [...] More
Bank of Canada to Cut Key Interest Rate Tomorrow
June 9, 2008
Similar to the FOMC, policymakers at the Bank of Canada schedule eight meetings per year to review economic conditions and set the overnight interest rate target. Under emergency conditions, the rate can be changed between meetings, but that happens very seldomly. The key rate was reduced at each of the last four meetings — by [...] More
New Overnight Developments Abroad - Daily Update
New Developments Abroad
June 9, 2008
The yen is soft, trading down 0.7% against the dollar. The U.S. currency otherwise shows losses of 0.3% against the pound, 0.2% against the euro, and 0.1% against the C-dollar and Swiss franc. The kiwi and Aussie dollar are unchanged. In Asia, the Nikkei sank 2.1%, the kospy fell 1.3%, and China’s CSI 300 slid [...] More
Foreign Exchange Insights and Next Week
Foreign Exchange Insights
June 6, 2008
The leaders of the world’s two most influenctial central banks served up major, and more importantly, conflicting surprises to the currency marketplace last week. Bernanke went first and lent the dollar a substantial boost. Trichet had the last word, sending the dollar to a net weekly loss of 1.1% against the euro as of 16:15 [...] More
Currency Markets in the News
EUR/USD Lifted By Higher U.S. Jobless Rate
June 6, 2008
The euro spiked upward to $1.5699 on the 0.5 percentage point jump in the U.S. jobless rate to 5.5%. While all other aspects of the monthly labor report were close to expectations and the 5.5% unemployment rate seems reasonable if not predicted, the data depict an economy that is skirting along the edge of a [...] More
