Deeper Analysis
May in Figures
May 31, 2013
May was a difficult month for commodity-sensitive currencies and ten-year fixed income securities. The U.S. dollar rose against most currencies between the start and end of May. Abenomics, a Japanese policy strategy to keep long-term interest rates low, boost share prices and counter upward pressure on the yen, was challenged in May, which saw the […] More
Foreign Exchange Insights and Next Week
Next Week
May 31, 2013
The first week of June will be dominated by the release of more than fifty separate purchasing manager surveys from around the world covering the manufacturing, services and for Britain, Australia and Germany construction. These are timely, broad-based sources of economic information about demand, production, inventory management, hiring, and prices. A second major focus in […] More
New Overnight Developments Abroad - Daily Update
May Ending in a Risk Averse Mood
May 31, 2013
Commodity-sensitive currencies had a difficult session. The New Zealand dollar dipped below $0.8000 for the first time since September 6, 2012. It fell as low as USD 0.7973 and is 1.0% weaker on balance. The Australian and Canadian dollars have slipped 0.8% and 0.5% against the greenback, which also has appreciated by 0.4% against the […] More
Foreign Exchange Insights and Next Week
A Decent Month for Both the Dollar and Euro
May 30, 2013
The dollar strengthened a tad less than one percent against the euro in May, but both currencies seem poised for respectable net appreciation against most other currencies, especially ones that are sensitive to commodity price swings. So far this month against the greenback, the Australian dollar has lost almost 7%. The kiwi has dived over […] More
Deeper Analysis
U.S. GDP Expanding Too Slowly to Pose Major Threat of Inflation
May 30, 2013
Between the first quarter of 2012 and the first quarter of 2013, U.S. real GDP, nominal GDP, and the core personal consumption expenditure price deflator rose by 1.8%, 3.4%, and 1.3%. Each of these increases was historically low and down from respective advances of 2.4%, 4.4%, and 1.9% in the previous statement year to 1Q12. […] More
New Overnight Developments Abroad - Daily Update
Japanese Market Volatility Intensifies
May 30, 2013
The more Japanese officials express unconcern, the uglier the mood of the markets there becomes. The Nikkei-225 plunged another 5.2% to 13,589, 13% below its May 22 closing level. Compared to its low that day of 103.74 per dollar, the yen’s high today of 100.46 constituted an appreciation of 3.3%. The 10-year JGB yield fell […] More
Central Bank Watch
A Second Central Bank Interest Rate Hike in Brazil
May 29, 2013
BrasÃlia-Giving continuation to the basic interest rate adjustment, the Copom decided unanimously to raise the Selic rate to 8.00% per year, without bias. The Committee notes that this decision will contribute to put inflation on the decline and ensure that this trend will continue next year. In several ways, today’s decision by the Central Bank […] More
Central Bank Watch
Bank of Canada Affirms Existing Policy Stance
May 29, 2013
The fourth of eight scheduled interest rate policy meetings in 2013 ended with the expected decision to keep a 1.0% overnight rate target and the release of a statement that affirms the price and growth forecasts published in the April Monetary Policy Report and the policy implications of that outlook. With continued slack in the […] More
Central Bank Watch
Monetary Policy Eased in Thailand
May 29, 2013
The Bank of Thailand’s policy interest rate has been reduced for the first time in 7-1/2 months. The cut of 25 basis points to 2.5% was expected by only about half of surveyed analysts. A statement from monetary officials left open the possibility to further easing if needed and explained today’s action as follows: Downside risks […] More
New Overnight Developments Abroad - Daily Update
Fresh Anxiety Grips Financial Community
May 29, 2013
Share prices have slumped by 1.6% in Hong Kong and Germany, 1.4% in France, and 0.7% in Spain and Italy. Japan’s Nikkei edged up 0.1%, and the British Ftse is over 1% stronger. Sovereign debt yields continue to climb faster than officials would like to see. The U.S. 10-year treasury yield is getting closer to […] More
