Deeper Analysis
August in Figures
August 31, 2011
In August, risk aversion shot up. Gold soared, while share prices and sovereign bond yields fell sharply. Most commodity prices including oil fell, and so did commodity-sensitive currencies. USD/JPY and EUR/USD closed practically unchanged for the month. Swiss officials took steps to reverse the franc’s strength, enabling the dollar to advance 2.5% against the Swiss […] More
Deeper Analysis
Huge Deterioration of Canadian Growth and Current Account
August 31, 2011
Canada’s current account deficit widened 52.2% between the first and second quarters and to 3.6% of GDP from 2.4% of GDP. Net exports exerted a gargantuan 5.7 percentage point drag on GDP growth in the second quarter, as exports sank 8.3% annualized while imports advanced 10.0%. Consequently, real GDP unexpectedly contracted 0.4% annualized last quarter, […] More
New Overnight Developments Abroad - Daily Update
Stocks Rose as Heavy Data Flow Continued
August 31, 2011
Share prices advanced by 3.3% in Singapore, 2.4% in Thailand, 2.0% in South Korea, 1.6% in Hong Kong, 1.2% in Taiwan, 1.0% in the Philippines, and 0.6% in Australia but were flat in Japan where weaker-than-expected industrial output data got released. The German Dax, Paris Cac, and British Ftse have so far scored solid gains […] More
Deeper Analysis
Worried Households in the United States, Europe and Japan
August 30, 2011
The Conference Board index of U.S. consumer confidence plunged 14.7 points in August to a reading of 44.5. It’s average score was 61.6 in the second quarter and 66.3 in the first quarter. Even those levels were quite weak compared to pre-recession norms. The last reading as low as 44.5 occurred in April 2009 when […] More
New Overnight Developments Abroad - Daily Update
Digesting End-August Data
August 30, 2011
European currencies were depressed by weak end-month regional data. The dollar has gained 0.8% against the euro, 0.7% relative to the Swissie, and 0.5% against sterling. The dollar otherwise edged up 0.1% against the Australian and Canadian dollars but fell 0.4% against the kiwi and 0.1% against the yen. The yuan is steady. Stocks advanced […] More
Central Bank Watch
Bank of Israel in Pause Mode with Lessening Urgency to Tighten
August 29, 2011
From a low of 0.5% prior to August 2009 when the Bank of Israel became the first central bank anywhere to tighten after the Great Recession, ten rate hikes had been implemented by May of this year. Today, the Bank of Israel decided to extend its three-month policy pause at least for another month and […] More
New Overnight Developments Abroad - Daily Update
Swissie Weakens, Commodity Currencies Strengthen, and Irene Not as Bad as Feared
August 29, 2011
The U.S. dollar rose 1.1% against the Swiss franc but lost 0.6% against the Canadian dollar, 0.7% relative to the kiwi and 0.4% against the Aussie dollar. Other dollar relationships are pretty steady, with dips of 0.1% against the euro, yuan and sterling and no change in the yen. Britain is closed for a late […] More
Central Bank Watch
No Change in Mexican Central Bank Rate
August 26, 2011
As expected, policymakers at the Bank of Mexico kept their benchmark interest rate at 4.5%. A released statement noted that The external environment deteriorated significantly in recent weeks; Productive activity in Mexico continues to trend positively, but its growth rate has lost some dynamism. Some components of domestic expenditure have slowed moderately, while exports remain […] More
Foreign Exchange Insights and Next Week
Next Week
August 26, 2011
Brazilian monetary policymakers will be meeting on August 30-31, and the release of FOMC minutes is scheduled for Tuesday. Also that day, Japanese lawmakers will vote on the successor to Prime Minister Kan. There is a British bank holiday on Monday, and U.S. Treasury market trading will close early on Friday to start the Labor […] More
Foreign Exchange Insights and Next Week
Next Stop: Irene
August 26, 2011
Chairman Bernanke’s predictable speech proved not to be a major market event. Equities, gold, and bond yields rose afterward in a sign of some relief about future risk. Consistent with those moves, the dollar fell against the euro, which at 16:50 GMT was hovering just below $1.45 versus a 2011 high so far of $1.4939. […] More
