Bonds and Stocks
January Markets in Figures
January 31, 2009
10-Yr Yield 12/31/08 01/30/09 Chg in Bps U.S. 2.12% 1.18% -94 Germany 2.95% 2.09% -86 Japan 1.18% 1.30% +12 U.K. 3.02% 3.70% +68 Canada 1.43% 1.62% -99 3-mos euros U.S. 1.43% 1.18% -25 Euroland 2.89% 2.09% -80 Japan 0.83% 0.67% -16 U.K. 2.77% 2.17% -60 Canada 2.18% 1.62% -56 Swiss 0.66% 0.43% […] More
Foreign Exchange Insights and Next Week
Next Week
January 30, 2009
The first week of February is very light on Japanese data — just the monetary base and index of leading economic indicators — but will comprise at least seven central bank meetings involving Euroland, the U.K., Australia, South Africa, Indonesia, the Czech Republic, Norway and Peru. Only the ECB is not expected to cut interest […] More
Foreign Exchange Insights and Next Week
Weekly Foreign Exchange Insights: January 30th
January 30, 2009
Movement in the dollar has an Alice-in-Wonderland feeling. Bad economic news ratchets up risk aversion, lifting the dollar counter-intuitively. It is hard to ignore instinct, as anyone who tries to steer into a skid quickly learns. Here’s another peculiarity: although risk aversion favors the yen, the dollar at 16:10 GMT today showed identical gains for […] More
U.S. and Canadian Growth
January 30, 2009
An unexpected rise in inventories led to a much smaller-than-expected 3.8% annualized decline of U.S. GDP last quarter. The quarter, along with 3Q74 when GDP also fell 3.8% saar, ranks only as the tenth worst one since mid-1947. The rise of inventories was unplanned and points to weaker growth in the first half of this […] More
Currency Markets in the News
Five Worst U.S. Quarters Since Mid-1947
January 30, 2009
In only five quarters since the middle of 1947 did real U.S. GDP decline by 5.0% or more at an annualized rate. Those quarters were 4Q60 (-5.1% saar), 1Q49 (minus 5.9%), 1Q82 (-6.4%), 2Q80 (-7.8%) and 1Q58 (-10.4%). Last quarter is likely to become the sixth instance of negative growth with a five- or worse […] More
New Overnight Developments Abroad - Daily Update
New Overnight Developments Abroad: Mixed Dollar Ahead of 4Q U.S. GDP Figures
January 30, 2009
In another sign of risk aversion, the yen (+0.6% against the dollar) is today’s strongest currency. The weakest ones are the Ozzie dollar (-1.8%) and the Russian rouble, which slid past 40 against its target basket. The dollar fell 0.2% against sterling but shows gains of 0.5% against the euro and kiwi and 0.3% relative […] More
The U.S. and the Yuan
January 29, 2009
It’s bad diplomacy and bad currency management for officials to urge other governments to appreciate their currency because the other money’s appreciation is your currency’s depreciation. Markets examine the comments of incoming governments extremely closely, and speaking only about a bilateral currency pair does not dilute the impression of a soft commitment to currency stability. […] More
Currency Markets in the News
The Next Asset Bubble
January 29, 2009
The shoe that still has not fallen is the bursting of an asset bubble in fixed income securities. Bond prices are unsustainably high, and yields are too to last forever. As with other bubbles like those in new investment technology, real estate and equities, the one in fixed asset extremes is a global phenomenon, and […] More
Currency Markets in the News
Recession Depressing German Inflation
January 29, 2009
In times of severe recession such as these, it is a semantic point whether a central bank ties policy to real activity or price trends. Both strategies lead to the same place. Take the case of Germany where consumer prices fell 0.9% at a seasonally adjusted annual rate in the six months to January in […] More
Central Bank Watch
Another 50-Basis Point Rate Cut in the Philippines
January 29, 2009
The Central Bank of the Philippines implemented a second 50-bp rate cut today as expected. Along with a similar move on December 18th, four 25-bp hikes between January and August of last year have now been reversed. The Monetary Board also cut reserve requirements to 8% from 10% back in November. The central bank lending […] More
