Deeper Analysis
April in Figures
April 30, 2012
Concern about the growth outlook in advanced economies revived in April, dragging share prices and both short- and long-term interest rates somewhat lower. Gold barely moved on balance, but oil prices closed higher for the month and stayed above the key $100 per barrel level. The yen strengthened 3.5% against the dollar, which slipped below […] More
Deeper Analysis
Canadian and U.S. GDP and Some Thoughts on Government Deficits
April 30, 2012
Canadian real GDP in the three months to February exceeded GDP in the previous three months by 2.0% at a seasonally adjusted annualized rate. For service-producing activities, GDP went up 2.1% annualized, while the growth rate for goods-producing industries, and its subset of industrial production, was 1.9%. The U.S. Commerce Department reported last Friday first-quarter […] More
New Overnight Developments Abroad - Daily Update
End-April Brings Confirmation of Spanish Recession
April 30, 2012
Spain posted a second consecutive quarter of negative GDP growth. Japan closed for Showa Day, commemorating Emperor Hirohito’s birthday. Euroland released data on consumer prices and money and credit growth. The dollar has advanced 0.4% against the Australian dollar, 0.3% versus the kiwi, and 0.2% relative to the loonie, euro and Swiss franc. The dollar […] More
Central Bank Watch
Bank of Mexico: Policy Unchanged
April 28, 2012
Mexican monetary policy has been in pause mode since July 2009. That’s when a 375-basis point reduction cycle of the overnight lending rate target reached a level of 4.5%. A statement after Friday’s meeting of the policy committee retained a downside possibility for the rate benchmark sometime in the future, contingent upon lessening world financial […] More
Foreign Exchange Insights and Next Week
Next Week
April 28, 2012
The coming week features the release of April purchasing manager survey results for manufacturing, services and, in the case of Britain and Germany, also construction. There are scheduled interest rate policy meetings at the European Central Bank, Reserve Bank of Australia, Bank of Thailand, Bank Negara Malaysia, Czech National Bank, and National Bank of Romania. […] More
Foreign Exchange Insights and Next Week
Will Currency Logjam Break Up in May?
April 27, 2012
The dollar fell modestly against the euro and Swiss franc during the last full calendar week of April, a bit over 0.5% against the British and Australian currencies, and slightly more than 1.0% relative to the Canadian dollar and Japanese yen. Since the start of the year, the dollar has eased by 5.0% or less […] More
Central Bank Watch
Bank of Japan Expands Quantitative Easing
April 27, 2012
After a one-day meeting lasting three hours and 42 minutes, the Bank of Japan announced a smaller net 5.0 trillion yen expansion of its Asset Purchase Program than many analysts had expected and hoped to see. Compositional changes also were unveiled that will lengthen the maturity of the asset portfolio and put additional downward pressure […] More
New Overnight Developments Abroad - Daily Update
More Disappointing News
April 27, 2012
S&P downgraded Spanish debt by two notches to BBB+ from an A rating previously and assigned a continuing negative outlook to such. Spanish unemployment jumped from 22.85% in 4Q11 to 24.44% last quarter, which was only a smidgen less than the historical high point. Spanish retail sales volume was 3.7% below a year earlier in […] More
Central Bank Watch
Hong Kong Continues to Mime Fed Policy
April 26, 2012
The Hong Kong Monetary Authority retained a 0.5% base rate, one day after the FOMC kept a zero to 0.25% federal funds target. The HKMA typically copies whatever the Fed does regarding the U.S. interest rate target with an announcement a day after the U.S. action. The base rate enjoys a slight premium relative to […] More
New Overnight Developments Abroad - Daily Update
Evidence of Weakening Euro Area Sentiment and Disagreement on Means to Grow Europe
April 26, 2012
The boost to stocks from Fed Chairman Bernanke’s press conference didn’t last long. Investors have taken from Bernanke that further stimulus measures will only happen if U.S. growth or inflation falters anew. Euroland economic sentiment dropped 1.7 points to a reading of 92.8, matching last December’s score. ECB President Draghi and French presidential candidate front-runner […] More
