Archive for February 2009

Currency Markets in the News

German 4Q Growth Deconstructed

February 25, 2009

Real growth last quarter tumbled 8.2% at an annualized rate (or -2.1% not annualized) and by 1.6% from a year earlier (or 1.7% after adjusted for a different number of working days).  This was the third consecutive quarter of negative growth after annualized declines of 2.2% in 3Q08 and 2.0% in 2Q08.  GDP growth in […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Surprising Calm

February 25, 2009

Markets are surprisingly calm.  Today had the potential to be difficult after Bernanke’s testimony, Obama’s virtual State of the Union Address, and the release of more troublesome data in Asia and Europe.  But the performances of Bernanke and Obama did more good than harm, and markets took a breather. Dollar movements have been mild: up […] More

Currency Markets in the News

G-7 Industrial Orders Bad All Over

February 24, 2009

In today’s overnight summary of economic news and market developments, I editorialized that the steep drop in Euroland industrial orders last quarter was as close as one generally gets to a free-falling trend.  The intent of this post is not to rescind that comment but to extend it to the rest of the Group of […] More

Central Bank Watch

Bank Negara Malaysia Cuts Overnight Target Rate by Another 50 Basis Points

February 24, 2009

Malaysia’s central bank cut its target rate to 2.0% from 2.5% and halved reserve requirements to 1%.  Two earlier rate reductions in the past three months amounted to 75 basis points on January 21st and 25 bps last November 24th.  Officials spoke of rapidly deteriorating trade, production and investment on a global and regional scale […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Yen, Dollar, Stocks, Bond Yields All Lower

February 24, 2009

The yen lost another 1.1% against the dollar, hitting a 12-week low. The dollar in turn is weaker by 1.0% against the Swiss franc and Australian dollars, 0.9% against the euro, 0.8% against the kiwi, 0.4% against sterling and 0.1% against the Canadian dollar. Ukraine’s hrynvia slumped to a new record low after a ratings […] More

Central Bank Watch

Monetary Policy Held Steady in Hungary and Eased in Israel

February 23, 2009

Magyar Zembeti Bank, Hungary’s central bank, left its key interest rate at 9.5%  as expected and released a statement that stressed the need to preserve financial market stability.  The forint, like several Eastern European currencies, has been under selling pressure, a development that has also weighed on the euro. The Bank of Israel somewhat unexpectedly […] More

Bonds and Stocks

Monday Monday, Can't Trust That Day

February 23, 2009

The DOW fell 3.4% today and on the first calendar week session in ten of the last eleven weeks. The index is 0.5% away from exceeding a cumulative drop of 50% from the October record closing high of 14165.  The market has lost 20.8% since Warren Buffett in mid-October pronounced that it was then a […] More

Canada In the Grip of a Triple Whammy

February 23, 2009

After an unexpected 1.3% annualized rise of real GDP in 3Q08, the Canadian economy fell into a severe recession and likely contracted by more than the Bank of Canada’s assumption of 2.3% in the fourth quarter of 2008.  The central bank also penciled in negative growth rates of 4.8% this quarter and 1.0% in 2Q09.  […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: WSJ Story on Citi

February 23, 2009

The U.S. federal government will buy up to 40% of Citigroup shares according to the Wall Street Journal. The report lifted bond yields, stocks and oil prices. The dollar rose 1.6% against the yen, surpassing last week’s high against the Japanese currencies.  The greenback also gained 0.8% against the Swiss franc but lost 1.1% versus […] More

Foreign Exchange Insights and Next Week

Weekly Foreign Exchange Insights: February 22nd

February 22, 2009

Intensifying risk aversion was apparent last week in loud chatter over the possibilities of emerging market debt defaults and nationalisation of many big banks.  If vocalized fear wasn’t enough, sharp additional declines in share prices provided quantifiable proof that elevated risk aversion was indeed real and not just a lot of talk.  In currency trading, […] More

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