European Periphery Returns to the Spotlight
Peripheral yields soared on Friday with the yield on Greece’s 10-year government bond rising to record levels as speculation that of a default continued to gain steam. At the same time yields on the equivalent German note, eased to 3.12 per cent as Bunds were sought as safe havens. The debate over whether Athens should [...]
Dollar Slide Generates “Risk On” Trade
The US dollar is set to end the week on a whimper with the combination of month end selling and momentum taking the dollar to new lows. An acceleration of euro zone inflation reinforced the divide between the Fed and ECB policy and prompted the euro to move above $1.485, while the Swiss franc advanced [...]
Interest Rates Continue to Drive Currency Movements
Equity markets continued to consolidate during the week, as Asian and Europe felt the pressure from higher interest rates, and US markets took a breather from the torrid upside pace. Commodities came under some pressure after the PBOC tightened interest rates for the second time in the past 2 months. The currency markets continued to [...]
US Employment Disappoints
US employment data is wholly disappointing. Job creation much less than expected, unemployment rate jumps, hourly earnings flat and work week flat. The back month revisions pale in comparison to the disappointment. The market expected a 150k increase in jobs and increase got 39k. Private sector was to add 160k and only added 50k. Manufacturing [...]
Korean IP Continues Helps Bank of Korea
South Korean industrial production rose less than expected in October, damping concerns that growth is fueling inflation and suggesting the Bank of Korea may remain on hold next week. Output increased 13.5% in October from a year earlier, compared with forecasts for a 15.1% gain. From a month earlier, production fell 4.2%, the third straight [...]
BOE and ECB leave Rates Unchanged
The ECB and the BOE left interest rates unchanged. Both central banks are taking a different approach to recovering economically compared to the US Federal Reserve. The FOMC yesterday announced a new 600 Billion dollar bond buying program in an effort to stimulate the US economy. In October the BOJ announced a similar asset purchasing [...]
Surprise Rate Hike by RBA Pushes AUD to New Highs
The Reserve Bank of Australia raised rates interest rates by 25 basis points to 4.75%, contrary to expectations for no change. According to The statement by Governor Stephens, the hike was triggered by a large expansionary shock to the economy. The second driver of the rate hike was that the economy has modest amounts of [...]
Australian CPI, Signals Rates are High Enough
Australian CPI conveniently works into the October RBA minutes. In fact q/q CPI rose 0.7% in Q3 versus Q2, a smaller than projected increase following the 0.6% gain in Q2. Y/Y CPI was 2.8% above the level in Q3 of 2009, also below expectations after the 3.1% y/y bit in Q2. Moreover, core inflation measures [...]
Aussie slides on unchanged interest rates
The Australian Dollar slid today in forex trading on account of the Australian central bank deciding to maintain the benchmark interest rates at their current levels. The RBA avoided changing interest rates to maintain economic recovery in the country. The Australian dollar fell to the lowest level in nearly 6 weeks, against all 16 of [...]
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