Deeper Analysis
Digging Out of the Great Recession
September 28, 2010
From their quarterly lows in the recent recession, real GDP by 2Q10 had recovered 4.8% in Japan, 3.4% in Canada, 3.0% in the United States, 2.0% in Great Britain and 1.9% in the euro area. But compared to their prior peaks, only Canada among these economies had essentially filled the hole made during the downturn. […] More
New Overnight Developments Abroad - Daily Update
Data Flow Picks Up
September 28, 2010
Typical of Tuesday and the approach of end-month, more data has been released today than yesterday. European sovereign debt concerns persist, but the dollar failed to advance on this. European data were reasonably healthy. The dollar is 0.3% softer against sterling, down 0.2% against the yen and euro, and off 0.1% versus the Aussie dollar, […] More
Central Bank Watch
Bank of Israel Tightens
September 27, 2010
Interest rate decisions by the Bank of Israel are made at pre-scheduled times but by a single person, Governor Stanley Fisher. Efforts are underway to cede authority to a committee, but that hasn’t happened yet. During the world and Israeli recessions, the central bank policy interest rate was cut eight times starting in October 2008 […] More
Central Bank Watch
Hungarian Central Bank Base Rate Left at 5.25%
September 27, 2010
Hungary’s base rate has been at 5.25% since a 25-basis point cut in April. Such had been the tenth consecutive monthly reduction and fifth drop in a row of 25 basis points in size. Earlier rate history included a 300-basis point jump in October, followed by a 50-bp cut in November, two cuts of 50 […] More
New Overnight Developments Abroad - Daily Update
Equities Firmer, Euro Softer
September 27, 2010
In the Pacific Rim, the strength of equities seen in North America on Friday was extended as investors take on more risk. Stocks rose 1.7% in China, 2.1% in Indonesia, 1.1% in Thailand, 1.4% in Japan, 1.6% in Australia, 0.9% in New Zealand, 0.8% in South Korea and 0.7% in Singapore. European trading shows greater […] More
Central Bank Watch
Bank of Mexico Overnight Rate Left at 4.5%
September 24, 2010
Mexico’s benchmark interest rate will remain at 4.5%, which it has been since July 2009. The decision not to raise the rate from its nearly 7-year low had been expected by analysts and was defended in a released statement by the following points: CPI inflation of 3.7% has been running below expectations. Projected growth in […] More
Foreign Exchange Insights and Next Week
Next Week
September 24, 2010
The coming week encompasses the cusp between the third and fourth quarters of 2010. Among the top tier of central banks, no interest rate policy meetings are scheduled, but monetary officials in Taiwan, Poland, Romania, Hungary, Russia and Israel are doing so. At least five FOMC officials are scheduled to speak in public, and so […] More
Foreign Exchange Insights and Next Week
A Fed Policy to Promote Dollar Depreciation
September 24, 2010
Since mid-2007, worsening global economic news had tended to support the dollar, which benefited from inflows of funds seeking safe parking. That metric broke down in the third calendar quarter, which ends next Thursday. Thursday will also mark the midpoint of the Japanese fiscal year. Many recent developments had potential to promote risk-reducing trading strategies. […] More
New Overnight Developments Abroad - Daily Update
Unsuccessful Japanese Intervention
September 24, 2010
It is believed that the Bank of Japan did a second round of forex intervention, selling yen in follow-up to the massive operation conducted on September 15. Unlike then, the central bank did not comment on or confirm that it had acted. Market participants were not surprised by the action, as the yen had crept […] More
Larry's Blog
American Headwinds
September 23, 2010
The start of the 21st century has been a difficult period for the United States. Analysts would not be calling this an age of uncertainty if risks were skewed mostly to the upside. Even before the onset of the subprime crisis in 2007 and its escalation into a full-blown financial and world economic recession, U.S. […] More
