Deeper Analysis
Explosive Growth in Foreign Exchange Market Volume Continued in 2007-2010
September 1, 2010
The Bank for International Settlements in Basle, Switzerland coordinates a triennial survey of global currency market transaction volume. A survey taken this spring revealed daily turnover of $3.981 trillion. Such was 19.8% greater than volume three years earlier, 105.8% bigger than six years ago, and 222.6% larger than in the 2001. The only three year [...] More
Stock Price Movements Since Their Late-April Peak
September 1, 2010
The Dow Jones Industrial average is 8.5% below its closing on April 26 in spite of the very robust beginning to September. That loss is greater than the net decline of 6.9% in the British Ftse and the 4.0% drop of the German Dax from their highest closing levels in late April. But the Dow’s [...] More
U.S. Regains PMI-Manufacturing Lead From Europe
September 1, 2010
The U.S. minus euro area PMI differential in manufacturing swung to +1.2 in August from minus 1.2 in July. The spread had been negative in July for only the first time since December 2008, averaging +3.0 in that 18-month span and peaking in January 2010 at +6.0. The U.S. purchasing managers index rose 0.8 points, [...] More
August 2010 in Figures
August 31, 2010
August had a different mood from July. Long-term interest rates tumbled, and the dollar rose except against traditional carry trade funding currencies like the Japanese yen and Swiss franc. The yen reached a new 15-year high of 83.61, and the Swissy’s monthly peak of 1.0135 per greenback almost matched the 2010 high. The dollar performed [...] More
Similar Canadian and U.S. Growth Trends
August 31, 2010
Canadian real GDP advanced 2.0% at a seasonally adjusted annualized rate (saar) in the second quarter and by 3.4% between 2Q09 and 2Q10. These results, announced earlier today, resemble U.S. trends. The compositions of Canadian and U.S. growth were less similar. In the comparative table below, “Cons” is an abbreviation for personal consumption, “Govt” stands [...] More
North American Data This Monday Morning
August 30, 2010
The Canadian current account deficit widened 30.2% last quarter to CAD 11.0 billion (equivalent to around 2.6% of GDP) as the trade balance swung into the red for the first time since 3Q09. After the start of the world financial panic, the current account weakened from a CAD 15.6 billion surplus in 2007 to a [...] More
Now and Yen
August 26, 2010
Official concern about yen strength is palpable and mounting by the day. Not since the last intervention in March 2004 has the possibility of government sales of yen been considered so carefully and so publicly. This week the yen touched a record high of 105.44 per euro, and the currency’s high of 83.59 per dollar [...] More
Fading Thrill of Global Growth
August 25, 2010
Economic prospects can change in a hurry. Revised growth projections released last month by the International Monetary Fund were quite respectable. The IMF staff was looking for a second straight year of 4%+ global growth in 2011. Emerging and developing nations would expand almost 7%, three times faster than the advanced nations. Within the latter [...] More
Japanese and U.S. Government Bond Yields
August 17, 2010
Japan provides a good example of what happens to long-term interest rates when very low inflation or outright deflation occur. The ten-year JGB yield has averaged 1.45% since the end of 1997. Such dropped below unity recently and is presently at 0.95%. The yield first plumbed below 1.0% in 1998 during the Asian debt crisis, [...] More
Treasury-Reported International Capital Data Illuminate Two Paradoxes
August 16, 2010
According to the release of Treasury Department TIC flow data, Chinese holdings of Treasury securities fell by 24.0 billion in June and were $51.5 billion lower at midyear than at the end of April. This news comes after a night of stories out of Asia that Chinese officials are discretely diversifying the country’s reserve portfolio [...] More
