Archive for March 3rd, 2009

Currency Markets in the News

ECB Preview

March 3, 2009

Despite verbal efforts by European Central Bank officials to temper market speculation that it will follow the lead of other monetary authorities and move eventually to zero or near-zero interest rates, I am as confident about a 50-basis point rate cut by the ECB on Thursday as I am about a Bank of England rate […] More

Bank of England Preview

March 3, 2009

The consensus expectation makes sense in this case.  Most pundits, including me, look for another 50-basis point drop in the Bank of England benchmark rate to 0.5%.  Put differently, Britain’s central bank will likely do Thursday at 12:00 GMT what the Bank of Canada did today at 14:00 GMT.  That would leave the G-7 with […] More

Bonds and Stocks

Eroding Confidence in Equities

March 3, 2009

Shifting rates of decline in share prices play a role as both cause and effect in the financially-inspired economic crisis.  Equity market behavior provides a barometer of confidence in the policy response to the crisis, expectations about how soon stability might return, and fears that capitalism will never be practiced the same way again. Talk […] More

Central Bank Watch

Bank of Canada Halves Overnight Money Target

March 3, 2009

Canadian monetary officials reduced their overnight money rate target by 50 basis points to 0.5%, hinted that more rate cuts are likely, and pre-announced that the semi-annual Monetary Policy Report, due April 23rd, will outline a framework for the possible use of credit and quantitative stimulus. Analysts had been divided over whether officials would ease […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Australian Central Bank Didn't Cut Rates

March 3, 2009

The dollar’s largest move was a 2.0% drop against the Ozzie dollar after the Reserve Bank of Australia unexpectedly kept its cash rate at 3.25% (see earlier RBA review).  Australian retail sales and current account data imply better growth last quarter than feared. Several market moves today have been counter to recent trends.  Dollar rebounded […] More

Reserve Bank of Australia Surprises Market

March 3, 2009

The RBA left its cash rate at 3.25%, 313 basis points higher than the Fed’s target and 175 bps above the ECB target assuming a 50-bp cut by that institution on Thursday. The RBA has already cut its benchmark by 400 bps since September and considers fiscal stimulus in train to be substantial.  Analysts had […] More