Archive for May 2008

Doubts Rise Bank of Canada Will Ease in June

May 27, 2008

Despite indications that Fed easing is on hold, a 25-bp rate reduction by the Bank of Canada on June 10th had been perceived as highly probable. Real GDP had risen just 0.8% saar in 4Q07. Wholesale turnover had declined in both 4Q07 (-0.3%) and 1Q08 (-0.8% from 4Q and -0.4% from 1Q07). Canada’s index of […] More

New Overnight Developments Abroad - Daily Update

New Developments Abroad

May 27, 2008

New burst of carry trading is reflected in the dollar’s drop of 0.3% against the kiwi, 0.2% versus the CAD and 0.1% against the Aussie dollar, juxtaposed against USD gains of 0.5% against the yen, 0.2% against the Swissy and 0.1% against the euro. USD also up 0.3% against sterling. Ten-year JGB yield hit a […] More

New Overnight Developments Abroad - Daily Update

New Developments Abroad

May 26, 2008

A quiet day looms. No significant data are due, and the British and U.S. markets are closed respectively for a bank holiday and Memorial Day. The dollar is narrowly mixed, with losses of 0.3% against the Swissy and 0.1% against both the C-dollar and Chinese renminbi but advances of 0.2% against the pound and 0.1% […] More

Larry's Blog

U.S. Jobless Claims on Sub-Recessionary Plateau

May 23, 2008

During previous U.S. recessions, new jobless claims have routinely surpassed 400,000 per week. They averaged 372.25K in the four weeks to May 17th, similar to means of 369.5K in the previous four weeks to April 19th and 374.75K during the four weeks to March 22nd. They may yet build up to a higher level, and […] More

Foreign Exchange Insights and Next Week

Foreign Exchange Insights

May 23, 2008

The global economy needed this past week’s 5.6% additional rise in oil prices like a whole in the head. The threat of a recession induced by inflation creates a more difficult task for policymakers than a downturn caused by a banking crisis. By answering the first challenge, moveover, the Fed has little left in the […] More

New Overnight Developments Abroad - Daily Update

New Developments Abroad

May 23, 2008

The dollar fell 0.5% against the yen and Aussie dollar. It’s down 0.2% against the Swissy and -0.1% relative to the kiwi but unchanged against the euro, sterling and yuan. Bond yields are sharply higher on inflation fears. Ten-year JGB yields hit a 9 month high and is up 4.5 bps net at 1.695%. Asian […] More

Currency Markets in the News

The French View of Foreign Exchange

May 22, 2008

Fixed dollar exchange rates, the keystone of the postwar Bretton Woods international monetary system, were abondoned in 1973. The two governments that most strongly resisted that change 35 years ago belonged to Japan and France, and among G7 countries they continue to mistrust markets to determine something as important as currency exchange values. The French […] More

Larry's Blog

Press Coverage of FOMC Minutes

May 22, 2008

The Financial Times, Wall Street Journal and New York Times found essentially the same message in minutes from the April 30th meeting. The operative mode of policymaking these days is balancing conflicting priorities, and that translates into a freeze on the present policy for quite sime time. The balancing act has two dimensions, first between […] More

New Overnight Developments Abroad - Daily Update

New Developments Abroad

May 22, 2008

The dollar has risen against most currencies but remains below levels at this time yesterday across the board. Since late in Wed N.Y. trading, the greenback shows gains of 0.3% against the yen and Swissy, 0.2% against the Aussie dollar and euro, and 0.1% versus the Canadian dollar. The kiwi jumped 1.0% in reaction to […] More

Larry's Blog

Reflections on FOMC Minutes

May 21, 2008

I take away three main thoughts, none of which is surprising. First, the outlook for growth is dim and worse than such seemed in January. Projected 2008 growth was revised down to 0.3-1.2% from 1.2-2.0%, strongly suggesting some negative quarters given on-year growth of 2.5% in 1Q08. But inflation prospects have worsened. Officials project PCE […] More

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