Deeper Analysis
August 2010 in Figures
August 31, 2010
August had a different mood from July. Long-term interest rates tumbled, and the dollar rose except against traditional carry trade funding currencies like the Japanese yen and Swiss franc. The yen reached a new 15-year high of 83.61, and the Swissy’s monthly peak of 1.0135 per greenback almost matched the 2010 high. The dollar performed […] More
Central Bank Watch
Pundits Digesting Nuances of Signals from the Fed, Bank of Japan and ECB
August 31, 2010
Among the most telling comments in the August FOMC minutes is the sentence, “Members generally saw both employment and inflation as likely to fall short of levels consistent with the dual mandate for longer than had been anticipated.” Often with a mandate to maintain price stability but also maximize jobs, there is a conflict with […] More
Central Bank Watch
Russian Key Interest Rate Left Unchanged at 7.75%
August 31, 2010
Bank Rossii left the Russian refinancing rate at a record low of 7.75%. It has been at that level since a 25-basis point cut effective last June 1st. From April 2009 until then, there were fourteen reductions totaling 475 basis points. Consumer price inflation of 5.5% in the year to July was less than half […] More
Deeper Analysis
Similar Canadian and U.S. Growth Trends
August 31, 2010
Canadian real GDP advanced 2.0% at a seasonally adjusted annualized rate (saar) in the second quarter and by 3.4% between 2Q09 and 2Q10. These results, announced earlier today, resemble U.S. trends. The compositions of Canadian and U.S. growth were less similar. In the comparative table below, “Cons” is an abbreviation for personal consumption, “Govt” stands […] More
New Overnight Developments Abroad - Daily Update
Stocks Closing Out a Bad Month on a Weakening Note
August 31, 2010
Japan’s Nikkei tumbled 3.6%, extending August’s loss to 7.5% and the decline since April 26 to 21%. Stocks also fell 1.0% in Hong Kong and South Korea, 1.6% in Taiwan, 1.1% in Australia, and 0.6% in India. In Europe, the Paris Cac and British Ftse are down 0.9%, and the German Dax has lost 0.7%. […] More
Deeper Analysis
North American Data This Monday Morning
August 30, 2010
The Canadian current account deficit widened 30.2% last quarter to CAD 11.0 billion (equivalent to around 2.6% of GDP) as the trade balance swung into the red for the first time since 3Q09. After the start of the world financial panic, the current account weakened from a CAD 15.6 billion surplus in 2007 to a […] More
Central Bank Watch
Bank of Japan Expands Liquidity-Enhancing Facility to Encourage Bank Lending
August 30, 2010
An unscheduled three-hour policy meeting was most noteworthy for actions not taken. A statement released by the Policy Board noted recently unstable currency and equity markets but said nothing about planned currency intervention or steps explicitly aimed at the stock market. Nor did officials change the key interest rate of 0.1% since December 2008 or […] More
New Overnight Developments Abroad - Daily Update
Emergency Bank of Japan Meeting Has Louder Bark Than Bite
August 30, 2010
The dollar fell overnight by 0.9% against the Canadian dollar, 0.6% versus sterling, 0.4% against the yen, and 0.1% relative to the Swiss franc. The dollar firmed 0.4% against the kiwi, 0.2% against the euro and 0.1% relative to the Australian dollar and Chinese yuan. Japan’s Nikkei-225 equity index closed 1.8% higher but had climbed […] More
Foreign Exchange Insights and Next Week
Next Week
August 27, 2010
The last week of the summer currency market season begins with a British bank holiday on Monday and ends Friday with an early closure of the U.S. Treasury market for the Labor Day holiday. Since the Memorial Day start of this period, the dollar has declined 6.3% against the yen and 3.6% versus the euro. […] More
Foreign Exchange Insights and Next Week
Summer Ending, so What’s Next in Forex?
August 27, 2010
Currency markets have mostly been marking time in late August. Since my previous Insights essay written two weeks ago, the U.S. currency experienced scant net changes of +0.7% and +0.4% against sterling and the euro, while edging down 0.2% against the kiwi and 0.1% versus the Australian dollar. The Chinese yuan is unchanged on balance […] More
