Deeper Analysis
May in Figures
May 31, 2012
May was an ugly month in financial markets. The fine risk-on/risk-off balance in investor psychology lurched decisively in favor of safety over investment return after inconclusive Greek elections on the first weekend of the month increased the possibility that Greece would leave the common currency area. Voters there and in other countries in the currency […] More
Deeper Analysis
Some New Perspectives on the State of U.S. Growth
May 31, 2012
First-quarter U.S. real GDP was revised from an annualized pace of 2.2% reported initially to 1.9%, thus becoming the fourth instance in the past five quarters when GDP failed to climb as much as 2%. GDP only rose 2.0% over the last four quarters. The five-year annualized growth rate (1Q07 to 1Q12) stands at 0.7%, […] More
Central Bank Watch
Brazilian Interest Rate Cut
May 31, 2012
Brazil’s monetary policy committee, COPOM, reduced its key Selic interest rate to 8.5% from 9.0% late Wednesday. Such was the seventh reduction in an easing cycle begun nine months ago from a peak of 12.5%. These seven cuts totaling 400 basis points offset eight increases totaling 375 bps between April 2010 and July 2011, and […] More
New Overnight Developments Abroad - Daily Update
European Share Prices Higher after Drop in Asia
May 31, 2012
May 31st is seeing the typical month-end deluge of economic data, some of which have proved better than expected. The volume of German retail sales rose 0.6% in April on top of May’s 1.6% increase. Euro area CPI inflation slowed more than expected to 2.4% in May from 2.6% in June. Swiss real GDP advanced […] More
Larry's Blog
Recommended Reading
May 30, 2012
If you get the chance, take a look at the following Op-Ed columns published this week. I recommend Our Imbecilic Constitution by Sanford Levinson, a University of Texas law and pol sci professor, published in the New York Times on May 29. Levinson’s essay hit a responsive chord in this corner. An earlier Larry’s blog […] More
New Overnight Developments Abroad - Daily Update
Fresh Cause for Investor Gloom
May 30, 2012
A press report from China dampened expectations of macroeconomic stimulus. The ECB turned down the Spanish government’s request for help bailing out Bankia. Italian sovereign debt auctions today produced only so-so results. Facebook’s share price fell further in after-hours trading to less than $28.50. Australian retail sales dropped to an 11-month low. Euroland’s economic sentiment […] More
Central Bank Watch
Turkish Monetary Policy on Hold, Too
May 29, 2012
The 7-day repo rate of the Central Bank of the Republic of Turkey was kept at 5.75% for another month as expected. It was last changed via a 50-basis point cut on August 11, 2011. Officials also made no change in the 5.0% overnight borrowing rate or the 11.5% overnight lending rate. A statement today […] More
Central Bank Watch
Monetary Policy in Hungary
May 29, 2012
Risk premia demanded by investors for holding Hungarian assets remain high. An escalation of concerns over the sustainability of sovereign debt in some euro-area countries may adversely affect premia on Hungarian financial assets. The Council therefore continues to consider it highly important that an agreement between the Government and the EU and IMF is reached […] More
Central Bank Watch
Monetary Policy on Hold in Colombia
May 29, 2012
The Central Bank of the Republic of Colombia’s overnight lending rate was left at 5.25% on Monday. This was the third straight monthly meeting to have produced such a result, and the vote by policymakers was unanimous. From a floor of 3.0%, they had previously raised the rate in 25-basis point increments seven times in […] More
New Overnight Developments Abroad - Daily Update
Dollar Basically Unchanged on Balance
May 29, 2012
The dollar has edged up 0.1% against the yen, Aussie dollar and kiwi and shows no net changes versus sterling, the Swiss franc, euro and yuan. Swiss central bankers reportedly are making contingency plans in case the euro splits apart. The 10-year German bund and British gilt yields are steady. The Japanese 10-year JGB yield […] More
