Archive for November 2010

Deeper Analysis

November in Figures

November 30, 2010

The second round of Fed quantitative easing was meant to depress long-term interest rates.  Many perceived a hidden agenda to weaken the dollar.  Neither trend played out in November unless one considers the fact that ten-year Treasury yields rose less than comparable rates in Japan and Canada as a moral victory.  Meanwhile, short-term rates barely […] More

Larry's Blog

Brief Look Back at November

November 30, 2010

In November, the fear of a new U.S. recession receded, helped by upbeat retail sales and labor market data.  In contrast, the euro area was subjected to intensifying centrifugal forces amid contrasting rates of economic growth among members, widening bond yield spreads, disappointing hard data for orders, GDP and retail sales but upbeat sentiment and […] More

Deeper Analysis

Canadian GDP Weaker Than Forecast

November 30, 2010

Real GDP expanded 1.0% at an annualized rate last quarter.  In the Bank of Canada’s Monetary Policy Report published last month, officials had projected growth of 1.6%.  Growth in Canada was less than half as fast as the 2.3% pace in the second quarter and less than a fifth as strong as the 5.2% annualized […] More

New Overnight Developments Abroad - Daily Update

More Downward Pressure on the Euro on a Day With Lots of Data

November 30, 2010

EUR/USD dipped briefly under $1.3000 for the first time since September 16 and shows a net additional overnight loss of 0.6%.  In contrast to its gain against the euro, the dollar fell 0.5% versus the yen.  Otherwise, the dollar shows gains of 0.2% against sterling and 0.1% relative to the Canadian and Australian dollars but […] More

Central Bank Watch

Hungary Gets its First Rate Hike of the Cycle

November 29, 2010

The base rate of the Magyar Nemzeti Bank was raised to 5.5% from 5.25% in a move that caught most analysts by surprise.  Other East European central bank rates such as Poland’s 3.5%, Romania’s 6.25%, and the Czech Republic’s 0.75% remain at their cyclical lows.  From November 2008 through April 2010, the base rate in […] More

New Overnight Developments Abroad - Daily Update

Euro Weaker Despite Aid Agreement for Ireland

November 29, 2010

The euro is 0.5% weaker than Friday’s close at $1.3173, which is also marginally softer than last week’s low. An EUR 85 billion aid package was reached with Ireland.  The composition of the bailout is EUR 45 billion from EU governments, 22.5 billion from the IMF, and the rest (20.6% of the total) from Ireland […] More

Foreign Exchange Insights and Next Week

Next Week

November 27, 2010

Central banks hold policy meetings next week in Hungary, Euroland, and Indonesia, and the Fed releases the Beige Book of regional conditions.  RBA Governor Stevens and ECB President Trichet will be speaking publicly.  Among Federal Reserve officials, Bernanke, Bullard, Kocherlakota, Fisher, Plosser, and Yellen have speaking engagements. Many purchasing manager surveys get released, covering Euroland’s […] More

Central Bank Watch

Bank of Mexico Policy Rate Unchanged

November 26, 2010

The overnight interbank funding rate will remain at 4.5%, the level since July 2009.  Rate cuts totaling 375 basis points were implemented in each of the first seven months of last year.  A new statement released today was less dovish than the one following the policy meeting in mid-October, noting that the output gap has […] More

New Overnight Developments Abroad - Daily Update

Markets Rattled by Two Persistent Risks: Korea and Ezone Debt

November 26, 2010

The dollar advanced sharply against the euro and commodity-sensitive currencies, with gains of 1.9% against the Australian dollar, 1.6% versus the kiwi, 1.4% relative to the Canadian dollar and 1.2% against the euro.  Other dollar rises overnight were much milder: 0.5% against sterling, 0.3% against the yen, 0.2% vis-a-vis the Swiss franc and no change […] More

New Overnight Developments Abroad - Daily Update

Currency Market Pause on Thanksgiving Day

November 25, 2010

Dollar movements have been narrowly mixed.  The U.S. currency is holding onto recent gains for the most part.  It is 0.4% stronger against the Swiss franc, up 0.1% versus sterling and the yuan, unchanged against the kiwi and yen, down 0.1% relative to the euro and Aussie dollar, and off 0.2% against the loonie. Stocks […] More

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