Archive for February 2014

Deeper Analysis

Great Recession Restored Pre-1999 U.S.-Minus-Ezone Growth Differential

February 25, 2014

The EU Commission’s 2014 Forecast, which was released earlier today, projects growth in the euro area of 1.2% this year followed by 1.8% in 2015, and it summarizes the region’s economic outlook in cautiously optimistic terms: Rebalancing of the European economy has been progressing and external competitiveness is improving, particularly in the most vulnerable countries. […] More

New Overnight Developments Abroad - Daily Update

Sharp Decline in Chinese Yuan to a Four-Month Low

February 25, 2014

The yuan weakened 0.4% against the dollar, arousing some suspicion that Beijing officials may be orchestrating the slide as a protest against rising strains with the United States over a variety of geopolitical matters.  Share prices in China continued their retreat, falling by a further 2.6%. Bank of England Monetary Policy Committee member Ian McCafferty […] More

Central Bank Watch

Bank of Israel Implements a 25-Basis Point Interest Rate Cut to 0.75%

February 24, 2014

Israel’s key central bank lending rate for March will be within 25 basis points of the Great Recession low of 0.5%.  Few analysts foresaw today’s rate reduction by monetary officials, which was the first drop since September 23 and the tenth consecutive decline of such magnitude dating back to September 2011.  Following the Great Recession, […] More

New Overnight Developments Abroad - Daily Update

Opening Act on Last Week of February

February 24, 2014

It’s been a comparatively uneventful Monday session for the dollar, which shows no net change against the euro, yuan or sterling, a 0.1% uptick against the Swiss franc, but 0.2% declines relative to the yen and Canadian, Australian and New Zealand dollars. Share prices slumped 2.2% in China, but less action was seen in other […] More

Deeper Analysis

What Harm Could a Small U.S. Interest Rate Hike Do in 2014?

February 21, 2014

This subject was broached today on Bloomberg Radio.  There are many people, some even among Federal Reserve officialdom, who’d like to see a down payment on interest rate normalization be made sooner, lest people start to believe that officials opposed will always find reasons to argue that rate tightening is too premature.  The 0-0.25% fed […] More

Foreign Exchange Insights and Next Week

Next Week

February 21, 2014

Central bank interest rate meetings will be held in Israel, Brazil and Colombia during the final week of February.  A speech on Thursday by Chairperson Janet Yellen leads a lengthy list of Fed officials making public statements next week.  Such also includes Rosengren, Tarullo, Pianalto, Evans, Lockhart, Plosser, Kocherlakota and Stein.  Bank of England Governor […] More

New Overnight Developments Abroad - Daily Update

Canadian Dollar, Australian Dollar and Chinese Yuan Are Weaker

February 21, 2014

The loonie has traded 0.6% lower against its U.S. counterpart ahead of the release of Canadian retail sales later today, which probably did poorly.  Canadian consumer prices also arrive. The yuan, off 0.2% today, will post its greatest weekly slide in a few years.  Chinese stocks fell 1.0% on concerns about the growth outlook in […] More

Foreign Exchange Insights and Next Week

Equities But Not Dollar Benefiting from a Lack of Alternatives

February 20, 2014

Former British Prime Minister Thatcher popularized the acronym T.I.N.A. — there is no alternative — to justify painful fiscal austerity and deregulation in the early 1980s.  The logic is analogous to a quote from Sherlock Holmes:  “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.”  The principle seemingly explains […] More

Uncategorized

More Risk Aversion

February 20, 2014

Japan’s Nikkei slumped 317 points or 2.2%.  Elsewhere in the Pacific Rim, share prices dropped 1.2% in Hong Kong, 0.9% in India and China, 0.6% in Taiwan and South Korea, and 0.1% in Singapore and New Zealand.  In Europe, Stocks are down 1.0% in Italy, 1.2% in Germany, 0.8% in Spain, 0.7% in Switzerland, 0.5% […] More

Central Bank Watch

FOMC Minutes

February 19, 2014

The most interesting paragraph to be found in minutes from the Federal Open Market Committee meeting of January 28-29 revealed that a few committee members desire a federal funds rate hike by around mid-2014, but few in the Fed lexicon suggests two or three people from a total of ten voting officials plus eight non-voting […] More

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