Central Bank Watch
Thursday’s Bank of England and ECB Policy Meetings
August 3, 2011
Markets anticipate no policy changes on August 4, and I agree. The Bank of England announcement comes first at 11:00 GMT and will only tell investors the bare bones of the decision, a continuing 0.5% Bank Rate level, which such has been since March 2009, and an unchanged asset purchase ceiling of GBP 200 billion, […] More
Deeper Analysis
DJIA: 11723 or Bust
August 3, 2011
A bull market in the DOW that began from a base of 777 on August 12, 1982 culminated on January 14, 2000 when the market closed at 11723. Although those 17+ years encompassed the 22.6% crash on October 19, 1987, identical 16.9% per annum rates of appreciation occurred from the close of 1739 on the […] More
Central Bank Watch
Latest Romanian Interest Rate Decision
August 3, 2011
Policymakers at the National Bank of Romania have the somewhat conflicting objectives of anchoring expected inflation and ensuring financial market stability via ample banking liquidity. Policy has not been changed since a 25-basis point cut of the key interest rate to 6.25% fifteen months ago in May 2010. That reduction culminated 400 basis points of […] More
Deeper Analysis
U.S. and Euro Area Service Sector Purchasing Manager Survey Results
August 3, 2011
Service sector PMI readings in July were below original expectations in both the United States and Euroland. In a weakening economy, the number of statistics that lie below expectations tends to outpace the number of positive surprises because the starting point of forecasting is an extrapolation of recent trend. Improved sales in July lent some […] More
Central Bank Watch
Swiss Central Bank to Wage War Against Strong Franc
August 3, 2011
In 37 years as a central banker, I cannot recall more strident language in a central bank statement than what the Swiss National Bank released today. The franc is called “massively overvalued at present.” Officials “will not tolerate” a continual tightening of monetary conditions caused by the rising franc. They promise to “significantly increase the […] More
New Overnight Developments Abroad - Daily Update
Stocks Down, Swiss National Bank Attacks Franc Strength
August 3, 2011
Calling the franc “massively overvalued at present,” Swiss monetary officials implemented a zero interest rate policy and announced other steps to flood domestic money liquidity. Further measures were promised “if needed” in this effort. The Swissy is 1.1% weaker against the dollar. Share prices in the Pacific Basin fell by 2.6% in Australia and South Korea, […] More
