Currency Markets in the News
Euroland Economy Poor But Better
July 30, 2009
Real GDP in the euro area contracted at the horrific rates of 4.5% in 2008 including 6.9% at an annualized rate (saar) in the final quarter. The downturn intensified with a drop of 9.7% saar in the first quarter of this year. Second-quarter figures get released two weeks from tomorrow on August 13th. Three sets […] More
The Consumer's Burden
July 28, 2009
Not long ago, house price stability was widely considered the main condition to end the U.S. recession on a sustaining basis. Today’s drop in equities suggests that stable house prices are no longer a sufficient or even the most important developments that is required. Today’s Case-Shiller report reflected much more improvement than anticipated. The composite […] More
A Question For Fed Chairman Bernanke
July 21, 2009
Chairman Bernanke used its House testimony today to lay out conditions that would compel the Fed to tighten monetary policy, a diminishing output gap, better labor market conditions, and evidence either of rising expected inflation or rising actual inflation. By framing the answer in conditional terms, analysts did not get a quantitative answer on the […] More
Global Recession Produced Collapsing Trade Flows
July 15, 2009
Collapsing is not my word. It’s how a report released today by the Organization for Economic Cooperation and Development chose to characterize commercial trade flows during the final quarter of 2008 and first quarter of this year. Nominal exports of goods and services from this 30-nation bloc of advanced economies dropped 13.4% in the first […] More
Bank of Japan Extends Duration of Quantitative Credit Facilities
July 15, 2009
Two unanimous 8-0 votes by the BOJ Policy Board agreed to leave the seven-month-old 0.1% overnight rate target unchanged and to push backward the expiration of temporary liquidity-supporting measures (e.g., outright purchases of corporate bonds and commercial paper) by three months. A statement from the central bank upgraded the economic statement, claiming that conditions are […] More
One-Year Anniversaries for Oil and the Euro and A Little History
July 14, 2009
West Texas Intermediate futures peaked on July 11, 2008 at $147.27 and are presently trading off 59.0% from that peak. Gold, by comparison, dropped only about 5% on balance over that period. Oil prices recorded lower period averages for eight consecutive months — $134.08 in June 2008, $133.97 in July, $116.69 in August, $103.57 in […] More
U.S. Joblessness and Retraining
July 6, 2009
A front-page article in the Monday New York Times by Michael Luo cites recent studies and presents anecdotal evidence that cast doubt on the effectiveness of job retraining courses as a strategy for reducing unemployment. I’m not surprised. Similar findings surfaced periodically during the second half of the 20th century. The process of creative destruction, […] More
PMI-Services Again Favor U.S. Over Euro Area
July 6, 2009
PMIs U.S. Ezone U.S. Ezone Sum of Services Services Spread Mf’g Mf’g Spread Spreads Feb 2008 49.7 52.3 -2.6 48.8 52.3 -3.5 -6.1 March 49.9 51.6 -1.7 49.0 52.0 -3.0 -4.7 April 51.9 52.0 -0.1 48.6 50.7 -2.1 -2.2 May 51.2 50.6 +0.6 49.3 50.6 -1.3 -0.7 June 48.8 49.1 -0.3 49.5 […] More
ECB: Decision and Comments Produce No Surprises
July 2, 2009
As universally expected, the rate structure of the European Central Bank was not changed at this month’s meeting: a 1.0% refinancing rate surrounded by a 0.25% deposit rate and a 1.75% marginal lending rate. President Trichet’s statement stressed predictable points as well. The existing rate structure is appropriate. Sub-zero CPI inflation had been anticipated by […] More
Swedish Repo Rate Halved Unexpectedly to 0.25%
July 2, 2009
A sixth rate reduction of this cycle has been implemented by the Swedish Riksbank. Today’s cut was from 0.50% to 0.25%, which was declared a “practical” lower limit in a statement released by monetary authorities. Therefore, officials said the 0.25% repo rate level would be likely to be retained for a year and announced additional […] More
