Deeper Analysis
More Evidence Surfaces of Economic Weakness
October 25, 2011
Here’s an inventory of some of the data disappointments that have arisen yesterday and today. Semi-annual revisions raised 2010 estimated euro area deficit- and debt-to-GDP ratios. The euro-17 deficit equaled 6.2% of GDP, over twice the targeted limit defined the common currency area’s founding documents. Last April, the 2010 estimated deficit ratio was 6.0%. Government […] More
Central Bank Watch
Dovish Statement from the Bank of Canada
October 25, 2011
The Bank of Canada left its 1.0% overnight money target unchanged as expected and released a more dovish statement than it had in September and much more dovish remarks than provided in July. In June, July, and September of 2010, three increases of 25 basis points were implemented, but no rate changes have been made […] More
Central Bank Watch
India’s Thirteenth Interest Rate Hike of this Tightening Cycle
October 25, 2011
Seven interest rate hikes so far in 2011 total 225 basis points and bring the levels of the repo (central bank lending) rate to 8.5% and of the reverse repo to 7.5%. The reserve requirement ratio was held steady at 6%, as it had at the previous policy meeting on September 16th. In 2010, there […] More
New Overnight Developments Abroad - Daily Update
Ezone Crisis Resolution Remains in Doubt
October 25, 2011
Overnight currency movement has been constrained outside of a 0.6% drop in the kiwi. The U.S. dollar dipped 0.3% against the loonie, 0.2% relative to the Swissie and sterling, and 0.1% versus the euro, and it is unchanged against the yuan and Australian dollar. In the Pacific Rim, equities were mixed. Advances were recorded of […] More
New Overnight Developments Abroad - Daily Update
France and German Still Apart over EU Debt Bailout Plan
October 21, 2011
The dollar has risen 0.4% against the euro, 0.3% versus the kiwi, and 0.2% relative to the Australian and Canadian dollars. It’s unchanged against sterling and the yuan and down 0.2% versus the yen and by 0.1% against the Swissie. These moves suggest lingering risk aversion. And why not? French President Sarkozy and German Chancellor […] More
Foreign Exchange Insights and Next Week
Next Week
October 20, 2011
Central banks hold policy meetings next week in New Zealand, Canada, India, Sweden and Japan. The Bank of Japan will release new growth and inflation projections after its meeting. The United States, Euroland, and Japan all have numerous meaningful data releases. EU leaders meet in Brussels on Sunday, and another summit is set for Wednesday. […] More
Foreign Exchange Insights and Next Week
Current Accounts Matter
October 20, 2011
Currency movement and indeed all traded financial instruments are being dominated by event risk out of Europe, where headlines are being dictated by political decisions more than underlying economic trends. Markets driven by politics are especially hard to play. Even if one’s assumptions prove ultimately correct, it still remains a daunting task to get the […] More
Central Bank Watch
Turkish Central Bank Hikes Overnight Lending Rate to Support Lira
October 20, 2011
Turkish monetary authorities essentially did a mea culpa today, taking some responsibility for hurting inflation expectations and the lira with earlier policy actions. The Central Bank of the Republic of Turkey overnight lending rate was increased 350 basis points to 12.5%, while the overnight borrowing rate was left unchanged at 5.0%. Their spread of 750 […] More
Central Bank Watch
More Dovish Statement by Bangko Sentral ng Pilipinas
October 20, 2011
The central bank in The Philippines left its key overnight borrowing rate at 4.5% and overnight lending rate at 6.5%. Reserve requirements were kept at current levels as well. A progressive and considerable shift from hawkish toward dovish thinking has occurred since back-to-back interest rate hikes of 25 basis points apiece on March 24 and […] More
New Overnight Developments Abroad - Daily Update
Conflicting Headlines Out of Europe Have Dollar and Stocks Both Weaker
October 20, 2011
Usually, but not so far today, the dollar and equities have moved inversely. Headlines covering euro debt crisis talks have been all over the map. German Chancellor Merkel and French President Sarkozy still cannot agree on how to lever the EFSF bailout fund upward to more than EUR 1 billion. Sarkozy left talks abruptly without […] More
