Archive for December 2008

Currency Markets in the News

G-7 in Recession

December 24, 2008

Christmas Eve finds all parts of the G-7 — the United States, Euroland, Japan, Britain, and Canada — in recession. They are not alone. New Zealand, Hong Kong, Singapore, South Korea, Taiwan, Iceland, the Ukraine, Estonia and Latvia are among the bunch of other economies also in recession. With oil below $40, Russia appears a […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Early Market Closures

December 24, 2008

Markets were closed today for Christmas Eve in numerous European centers such as Germany, Spain, Italy, Sweden, Norway, Switzerland. British and French markets are shutting at 12:30 GMT and 13:00 GMT. Much of Europe doesn’t open until Monday. Early closings are also set for North America. Sterling has softened 0.4% against the dollar, which otherwise […] More

Britain's Recession

December 23, 2008

U.K. GDP sank 0.6% not annualized last quarter, five times faster than U.S. GDP. Such was the worst outcome in 71 quarters yet will look mild compared to what fourth-quarter and 1Q09 figures are likely to show. British personal consumption (-0.2%) was very resilient in comparison with its U.S. counterpart, but U.K. investment (-2.8%) was […] More

U.S. Growth Before the Collapse

December 23, 2008

Final revised figures show a 0.51% annualized drop of real GDP in the third quarter, as a negative 3.54 percentage point  (ppt) drag from personal consumption (off 2.75 ppts) and investment (-0.79 ppts) was mitigated by net exports (+1.15 ppts), government spending (+0.84 ppts) and unplanned inventory building (+0.84 ppts). GDP still eked out a […] More

Central Bank Watch

Chinese Rate Cut Statement Reveals Little

December 23, 2008

A statement on the PBOC web site merely details the further easing of monetary policy announced yesterday without explaining why the actions were taken. But such was the fifth rate cut following moves on September 15, October 8, October 29, and November 26. And a recent round of monthly indicators points to a much more […] More

Central Bank Watch

National Bank of Poland Cuts Main Reference Rate by 75 Basis Points to 5.0%

December 23, 2008

A 75-bp rate reduction surpassed expectations for a 50-bp cut. Along with an easing in November of 25 basis points, the central bank has reversed four earlier increases this year of 25 basis points each January, February, March and June and thus restored interest rates to their levels at the start of this year. More […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Deeper Recessions in Britain and New Zealand

December 23, 2008

Asian stocks fell, led by a drop of 4.9% in China on disappointment interest rates were not cut more sharply. Equities fell 2.9% in Taiwan, 2.8% in Hong Kong, 2.4% in India, 3.0% in South Korea, and 1.2% in Singapore. Thailand (+1.5%) bucked the trend. Australian stocks eased 0.7%. In Europe, the German Dax and […] More

New Overnight Developments Abroad - Daily Update

Monday Executive Recap

December 23, 2008

The dollar rose 1.1% against the yen, surpassing the 90 level, but lost some marginal ground against the euro and its trade-weighted index. Most equities fell in Asia, Europe, and North America. Oil climbed back above $40, and gold rose too. Chinese interest rates were cut 27 basis points. The new 5.31% lending rate is […] More

Currency Markets in the News

Deficit Spending and Long-Term Interest Rates

December 22, 2008

Warnings have begun that U.S. long-term interest rates will turn higher by the second half of 2009, possibly significantly, under the weight of massive government deficit spending. This of course did not happen in Japan, so a brief review of that economy’s experience seems  timely. Japan’s housing bubble burst in the early 1990’s. There was […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: China Interest Rates and Reserve Requirements Cut Again

December 22, 2008

Stocks are lower. In the Pacific Rim, stocks fell by 3.3% in Hong Kong, 2.9% in Thailand, 2.8% in Singapore, 3.3% in the Philippines and 1.6% in Australia. A 1.6% rise of Japan’s Nikkei-225 index was an exception to the global downtrend. In Europe, the Paris Cac, German Dax, and British Ftse are trading down […] More

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