Awaiting U.S. Retail Sales, Consumer Price Data, and FOMC Minutes

November 20, 2013

After predictably dovish remarks from Ben Bernanke, the soon-to-be ex-Fed Chairman, the dollar has ticked down 0.2% against the euro, Swiss franc, Australian dollar and sterling.  The yen is unchanged following report of another large trade deficit, and the kiwi has risen 0.2% after higher-than-expected New Zealand producer price figures.  The yuan is also unchanged […] More

Diverse Movements in Foreign Exchange

July 19, 2013

Great stability around the $1.30 level continues to characterize the key EUR/USD relationship.  Coming into 2013, the euro was expected to trade considerably weaker than this threshold.  For the past several years, in fact, there have been analysts predicting a return to par, based on Europe’s relatively weak economy, the fragility of Europe’s banks, and […] More

Equities Closing Week on a Down Note

July 19, 2013

Microsoft and Google reported weaker-than-expected earnings, sending both stocks lower in after-hours trading. Japan’s upper house election on Sunday and ongoing worries about the extent of China’s slowdown are other uncertainties. In his reprised testimony before the senate Thursday, Fed Chairman Bernanke continued to send a mixed, and therefore somewhat confusing, message.  While not backing […] More

Chinese Yuan Weaker

July 18, 2013

Chinese monthly house price data revealed continuing upward pressure.  Related to this, officials set the yuan at its weakest level in ten days.  British retail sales figures exhibited greater-than-anticipated strength. Fed Chairman Bernanke will be reprising yesterday’s semi-annual testimony before the Senate Banking Committee today.  On Wednesday, he asserted that no pre-announced tapering path of […] More

Fed Chairman Succession Timelines

July 17, 2013

It seems nearly certain that Ben Bernanke will not serve a third consecutive four-year term as Fed Chairman.  His stewardship ends on January 31, 2014. Fed Chairmen are appointed by the president, subject to senate confirmation.  Bernanke’s immediate predecessors were Paul Volcker and Alan Greenspan. The selection of Greenspan was announced by President Reagan on […] More

Festering Concerns about a Chinese Credit Crunch, European Banks, and Fed Tapering

June 24, 2013

Another steep drop in Asian and European share prices opened the final week before mid-2013. Equities plunged 6.1% in China, 3.4% in the Philippines, 2.2% in Hong Kong, 1.9% in Indonesia, 1.6% in Singapore, 1.5% in Australia, 1.3% in Japan, South Korea and India, and 1.0% in Malaysia. Stocks are down so far by 1.1% […] More

Fed’s Optimistic Outlook Unlikely to Happen

June 20, 2013

Biological metaphors help to understand what’s happening in U.S. and global financial markets. Financial markets are like an over-active auto-immune system.  Weakened economies get monetary medicine to nurse them back to health.  As the process evolves, the medicine is withdrawn gradually, not all at once.  Ideally, policymakers want the increments of policy change to be […] More

An Eagerly Awaited FOMC Message

June 19, 2013

The FOMC statement will be released in less than two hours, along with new forecasts.  The previous statement on May 1 caught the market’s attention with the addition of a sentence saying, “The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation at the outlook for the […] More

Mostly Marking Time Ahead of FOMC Revelations

June 19, 2013

The recent trend toward a firmer yen got a boost from Japanese trade data.  The yen touched overnight highs of 94.82 per dollar and 127.04 per yen, but the net appreciation against the U.S. currency from Tuesday’s close was only 0.2%.  Other dollar changes have been similarly contained, with no net movement against the euro, […] More

All Eyes on the FOMC

June 18, 2013

Whether, when, and by how much to taper quantitative stimulus is the question of the day, as the FOMC meets on the first day of a 2-day meeting.  Creating even more uncertainty, President Obama while attending the G8 summit indicated that Chairman Bernanke had not originally planned to stay in that post as long as […] More