Archive for July 2012

Deeper Analysis

July in Figures

July 31, 2012

European interest rates fell sharply at the short and long end in July.  The U.S. yield curve flattened.  The dollar fell against commodity-sensitive currencies and the yen, advanced against the euro and Swiss franc, and closed virtually unchanged against sterling and the Chinese yuan.  Net movements in oil and gold prices were comparatively small especially […] More

Central Bank Watch

Reserve Bank of India Tweaks a Reserve Requirement but Leaves Repo Rate Unchanged at 8.0%

July 31, 2012

A statement from Indian monetary officials released after the latest quarterly economic review Left key interest rates steady. Reduced the Statutory Liquidity Ratio (SLR) to 23% from 24% effective August 11.  The cash reserve requirement stays at 4.75%, however. Modified its 2012 projections for both GDP growth and WPI inflation. Upheld the primacy of containing […] More

Deeper Analysis

Slower Growth in Most Corners of the Globe

July 31, 2012

The final days of each month tend to be a rich minefield of economic data releases around the world.  This update presents some of this month’s highlights, which collectively paint a picture of sluggish global activity. Perceptions about the United States are that trends are frustratingly sluggish but that conditions are not as poor as […] More

New Overnight Developments Abroad - Daily Update

Investors Brace for End-Month Flood of Information

July 31, 2012

Dollar movement overnight was limited to gains of 0.1% against the yen and sterling and losses of 0.3% versus the yuan, 0.2% against the euro, kiwi and Australian dollar, and 0.1% relative to the Swiss franc.  The loonie is unchanged against its U.S. counterpart. Share prices advanced 2.1% in South Korea, 1.6% in Taiwan, 1.1% […] More

New Overnight Developments Abroad - Daily Update

Anticipating Coordinated Monetary Easing as Reported Data Were Mostly Soft

July 30, 2012

Share price gains overnight continue to reflect optimism that the ECB will take forceful action Thursday to preserve the euro.  Stocks are up 1.9% in Spain, 1.0% in Germany, 0.8% in France and 0.6% in Britain.  In the Pacific Rim, equities climbed 1.8% in India, 1.6% in Hong Kong, 1.1% in Singapore and the Philippines, […] More

Central Bank Watch

An Interest Rate Trend Reversal in Colombia

July 28, 2012

The previous nine changes in the overnight lending rate of the Central Bank of the Republic of Colombia had all been increases of 25 basis points.  This tightening was undertaken from February 2011 to February 2012 and had raised the benchmark from 3.0% to 5.25%.  The Board of Directors had not changed the stance at […] More

Foreign Exchange Insights and Next Week

Next Week

July 27, 2012

A meaty week of central bank events and released economic data lies ahead.  Monetary policy decisions will be announced by the Federal Reserve, European Central Bank, Bank of England, Czech National Bank, National Bank of Romania and Reserve  Bank of India.  The ECB decision on Thursday will be followed by an all-important press conference.  The […] More

Deeper Analysis

EUR/USD in the Second Half of the Calendar Year

July 27, 2012

A point made in this week’s Foreign Exchange Insights essay stipulates that a spontaneous depreciation of the euro is unlikely to happen spontaneously in sufficient size as to strengthen the competitiveness of Euroland’s regional economies greatly and thereby save the common currency from a rupture involving more members than just Greece.  The euro would need […] More

Deeper Analysis

U.S. GDP — Some Observations

July 27, 2012

Economic growth in 2Q12 of 1.5% annualized was very close to expectations.  A 1.5% advance in personal consumption was its weakest pace in a year, and government expenditures (down 1.4%) fell for the eighth consecutive quarter.  The drag from net foreign demand and boost from inventory building exactly offset one another last quarter, while nonresidential […] More

New Overnight Developments Abroad - Daily Update

Bundesbank Says Not So Fast

July 27, 2012

After ECB President Draghi yesterday said the central bank will do whatever is needed to preserve the euro, officials at the German Bundesbank reaffirmed their opposition to buying peripheral sovereign debt via the SMP facility.  An ECB meeting is scheduled next Thursday. A number of further indications of softer European economic activity emerged in released […] More

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