Edit
) no-repeat top center;background-size:cover'>

Significance of EC Shuffle

November 30, 2009
Over shadowed by the emergence of Dubai's financial crisis, the European Commission was re-shuffled. France and Finland were given the highly coveted portfolios of internal markets (which is to include financial services regulation) and the economic and financial affairs respectively Michel Barnier and Olli Rehn. Spain's Joaquin Almunia wa…
Significance of EC Shuffle Significance of EC Shuffle Reviewed by magonomics on November 30, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

The Implications of Dubai's Financial Crisis

November 30, 2009
A storm broke out last week, emanating from the part of the world that is widely seen as a major beneficiary of the rise in oil prices. Yet Dubai’s story is not about oil. Indeed it is precisely the absence of oil and natural gas (less than 6% of GDP) that prompted this emirate go down the path of tourism, hospitality, and commercial real estate d…
The Implications of Dubai's Financial Crisis The Implications of Dubai's Financial Crisis Reviewed by magonomics on November 30, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Check-in Brazil ADRS vs Local Shares

November 25, 2009
One of the noteworthy developments here in Q4 has been the renewed interest in capital controls by countries trying to manage the flood of portfolio capital. Brazil's 2% tax on purchases of Brazilian stocks and bonds is among the most significant examples.
Check-in Brazil ADRS vs Local Shares Check-in Brazil ADRS vs Local Shares Reviewed by magonomics on November 25, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>
ECB and BOE Continue to Provide Dollar Liquidity ECB and BOE Continue to Provide Dollar Liquidity Reviewed by magonomics on November 25, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Why The Dollar is Broadly Lower

November 25, 2009
The combination of the apparent resolution of the West LB situation and the FOMC minutes have conspired to send the US dollar broadly lower today. The FOMC minutes in particular have been seized upon. On one hand, it is unusual for the FOMC to give so much space to a discussion about the dollar. This is, however consistent with what appears to be …
Why The Dollar is Broadly Lower Why The Dollar is Broadly Lower Reviewed by magonomics on November 25, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Banking Center Updates

November 24, 2009
Developments in the banking sector have somewhat overshadowed German economic news today. Yet German GDP data may stand in contrast to US GDP due this morning. It’s not that German Q3 GDP was stellar. Q3 GDP was unchanged from the preliminary data at 0.7% q/q (and -4.8% y/y) and a breakdown of the data showed consumption continued to fall (down 0.…
Banking Center Updates Banking Center Updates Reviewed by magonomics on November 24, 2009 Rating: 5
Edit

Greece Tensions Growing More Acute

November 24, 2009
The pressures on Greece continue to increase and this is reflected in the credit default swaps and the interest rate spread over Germany. Indeed, that is a key development in the euro zone over the past month, Greece yields have risen above Ireland, which had been the highest yield in EMU this year. Ten year Greek yields are just below 5%, while I…
Greece Tensions Growing More Acute Greece Tensions Growing More Acute Reviewed by magonomics on November 24, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

ZAR Best Performing Currency

November 23, 2009
The South African rand is the strongest currency today, gaining 1.87% against the sagging greenback. Several factors are helping lift the rand.
Many are linking the rally in gold to new record highs with the rand's strength. Year to date the correlation between dollar-rand and gold is -18.8%. The euro has been more correlated with gold year to…
ZAR Best Performing Currency ZAR Best Performing Currency Reviewed by magonomics on November 23, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

T-Bills

November 23, 2009
With U.S. T-bill yields hovering near zero, today's weekly bill auctions may attract more general market attention than usual. Here is what is going on: due to the approaching debt ceiling, the US debt managers have reduced T-bill sales. At the same time, the demand for short-term paper is great.
T-Bills T-Bills Reviewed by magonomics on November 23, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Speculative Positioning

November 23, 2009
The latest commitment of traders, reported late Friday for the week through Nov 17th showed that speculators (non-commercials) had pared back their bets. Given that interest rate differentials remain decidedly dollar negative, sentiment poor and some ideas that the U.S. may be forced to extend either its credit easing or its fiscal stimulus longer…
Speculative Positioning Speculative Positioning Reviewed by magonomics on November 23, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Watch $1.4880 in the Euro for Dollar Direction

November 20, 2009
There is much talk in the markets about a double-no-touch structure between $1.48 and $1.51. However, more immediately we think the $1.4880 area is a key pivot. A move above $1.4880 would take neutralize the downside pressure on the euro and point to a retest on the $1.4960-$1.5000 that has capped upticks over the past few sessions.
Watch $1.4880 in the Euro for Dollar Direction Watch $1.4880 in the Euro for Dollar Direction Reviewed by magonomics on November 20, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Bernanke's Comments...What it All Means

November 17, 2009
Leaving aside the market's immediate reaction, Fed Chairman Bernanke's comments about the dollar are very revealing, not just for his thinking, but it likely reflected senior officials in the Obama Administration as well. In the last FOMC statement that the Fed highlighted three considerations behind its view that its Fed funds target can …
Bernanke's Comments...What it All Means Bernanke's Comments...What it All Means Reviewed by magonomics on November 17, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Another Push on The Dollar

November 16, 2009
In the post-Bernanke market, the dollar has fallen to new lows for the session against all of the majors. what did Bernanke say that was so dollar negative? Nothing. The market was not convinced that he will make his concern or monitoring of the dollar with action. Indeed, Bernanke played this down the inflationary significance of the dollar's…
Another Push on The Dollar Another Push on The Dollar Reviewed by magonomics on November 16, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

More on Bernanke

November 16, 2009
If officials do not like foreign exchange volatility, Fed Chairman Bernanke may not be pleased with the market response. The mention of the dollar, which traditionally is a topic the Fed defers to the Treasury Dept, prompted interbank and option dealers to cover short dollar positions, even though no new ground was covered or specifics cited. Howe…
More on Bernanke More on Bernanke Reviewed by magonomics on November 16, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Bernanke Sends Dollar Higher

November 16, 2009
We have noted that in recent weeks, the Fed officials have not been shy about commenting about the dollar, even when unsolicited by reporters. The first comments from Bernanke point to this as well. Bernanke says that the Fed is keeping an eye on the dollar--though apparently not sufficiently to mention it in the recent FOMC statement. He also say…
Bernanke Sends Dollar Higher Bernanke Sends Dollar Higher Reviewed by magonomics on November 16, 2009 Rating: 5
Edit

Credibility Issues Weigh on Greek Bonds

November 16, 2009
Greek bonds continue to be worst performer among European bonds. The 10-year bond yield is up another 10 bp today after a move of roughly the same magnitude at the end of last week.
When the new government under PM Papandreou (elected early Oct) claimed that the deficit it was inheriting was twice what the previous government had projected, there …
Credibility Issues Weigh on Greek Bonds Credibility Issues Weigh on Greek Bonds Reviewed by magonomics on November 16, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

What to Expect from Bernanke Today

November 16, 2009
Federal Reserve Chairman Bernanke will speak about the economy in NYC at lunch today. There are a few points that the market will be closely watching.
1. He is likely to reiterate the general thrust of the recent FOMC statements. The economy is recovering, but it remains fragile and price pressures remain well contained. The Fed is in no hurry to …
What to Expect from Bernanke Today What to Expect from Bernanke Today Reviewed by magonomics on November 16, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Japan Stock Market

November 16, 2009
Next month will be the 20th anniversary of the peak in the Japanese stock market. Chinese officials attribute Japanese capitulation to the relentless US demands for currency appreciation as a contributing factor to the poor performance over the past two decades and do not want to be caught in the same trap. Consider that in early 2005, notable eco…
Japan Stock Market Japan Stock Market Reviewed by magonomics on November 16, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

APEC

November 16, 2009
There was no important break through at the weekend APEC meeting. The ministers promised to resist protectionism and adopt structural reforms as necessary to unwind the global imbalances, but without detailing specific changes or making new commitments, one must assume little has changed. If anything the reluctance of officials to seek yuan apprec…
APEC APEC Reviewed by magonomics on November 16, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Data Favoring Another Israel Rate Hike

November 16, 2009
The central bank of Israel hiked rates in August to become the first to begin to normalize monetary policy during the recovery. It held rates steady in Sept and Oct, but speculation is increasing that it will hike rates again when it meets on Nov 23.
Data Favoring Another Israel Rate Hike Data Favoring Another Israel Rate Hike Reviewed by magonomics on November 16, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

IPOs may Steal Limelight from Fixed Income Next Week

November 13, 2009
The US Treasury successfully completed its record quarterly refunding this week and Corporate America, not deterred by the mid-week holiday, appear to have raised $20 bln in new bond offerings. Nearly $10 bln of corporate bonds was sold on Monday Nov 9th, the busiest day in about a month. Typically, the post-Thanksgiving period sees a significant …
IPOs may Steal Limelight from Fixed Income Next Week IPOs may Steal Limelight from Fixed Income Next Week Reviewed by magonomics on November 13, 2009 Rating: 5
Edit

Reviewing the Dollar’s Outlook

November 13, 2009
The U.S. dollar appears to be stabilizing. We continue to believe that the main forces that have undermined it are largely cyclical rather than structural in nature. Several months ago we identified three indicators that would help investors time the dollar’s bottom: short-term interest rate differentials, the status of the general risk-on/risk of…
Reviewing the Dollar’s Outlook Reviewing the Dollar’s Outlook Reviewed by magonomics on November 13, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Import Prices Trend Higer

November 13, 2009
US import prices rose 0.7% in October. The market was expecting an increase closer to 1%. However, the underlying trend is clear. Import prices have risen in all but two months thus far in 2009. The fact that imported prices are still off 5.7% from a year ago is reflecting the base effect of the collapse of import prices in the Aug-Dec period. Imp…
Import Prices Trend Higer Import Prices Trend Higer Reviewed by magonomics on November 13, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Developing Europe Still Contracting

November 13, 2009
Of the major industrialized, only Japan and Canada have not reported Q3 GDP estimates. Japan reports on Monday is expected to have expanded at almost the same pace as the US. On the quarter the US expanded by almost 0.9%, while the Japanese economy may have expanded by around 0.7%. With the Big Three in the euro zone reporting, the preliminary est…
Developing Europe Still Contracting Developing Europe Still Contracting Reviewed by magonomics on November 13, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

China

November 13, 2009
Speculation that China may move on its currency this weekend will likely prove for naught. Nevertheless yuan non-delivered forwards continue to rise today and indicative pricing for the 12-month NDF is for a 3.6% appreciation, the most in several weeks. Many observers, including the media risk exaggerating that Nov 11 report by the central bank th…
China China Reviewed by magonomics on November 13, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Red Letter Day: Repeal of Glass-Steagall 10-years Old

November 12, 2009
Ten years ago today US President Clinton delivered the coup de grace to the Glass Steagall Act, which had in any event been diminished by 1000 cuts by officials in the prior couple of decades.
Many observers attribute a good part of the US financial crisis to the repeal of the Glass-Steagall prohibitions preventing a cross fertilization of investm…
Red Letter Day: Repeal of Glass-Steagall 10-years Old Red Letter Day: Repeal of Glass-Steagall 10-years Old Reviewed by magonomics on November 12, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Changes in MSCI Emerging Market Indices-Effective Month End

November 12, 2009
As part of its semi-annual review, MSCI has announced changes in global emerging market benchmark indices, with China and Brazil stocks among the main beneficiaries. MSCI estimates that more than $3 trillion are benchmarked against indices globally. The changes will be be effective at the end of the month.
Changes in MSCI Emerging Market Indices-Effective Month End Changes in MSCI Emerging Market Indices-Effective Month End Reviewed by magonomics on November 12, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Asian FX Rates

November 12, 2009
There may be much back-slapping over the fact that Asian-Pacific finance ministers have endorsed market-oriented exchange rates, consistent with the op-ed piece in today's Wall Street Journal by the US Treasury Secretary and the finance ministers from Indonesia and Singapore. But actions will speak louder than words and there is much precedent…
Asian FX Rates Asian FX Rates Reviewed by magonomics on November 12, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

What Euro Options are Telling Us about Spot

November 11, 2009
The options market can often shed light on spot market activity. Indicative pricing in the options market suggests that while the euro is nearing the highs for the year, many participants seem unusually nervous. Often the options market moves in tandem with spot. So in a rising market, the demand for calls is greater. However, this is not the case…
What Euro Options are Telling Us about Spot What Euro Options are Telling Us about Spot Reviewed by magonomics on November 11, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Global Recovery Lifts Poland and Israel

November 11, 2009
While the Asian recovery story is front and center today, with the slew of Chinese data, including the nearly doubling of its monthly trade surplus, and Japanese machinery orders showing more than twice the expected rise, following favorable trade news on Tuesday, trade data from Poland and Israel provides additional evidence of the synchronized g…
Global Recovery Lifts Poland and Israel Global Recovery Lifts Poland and Israel Reviewed by magonomics on November 11, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Taiwan News

November 11, 2009
Taiwan's decision to ban foreign investors from parking funds in time deposits is having little market effect. There did not seem to be unusual movement. While the stock market was up 1%, it seemed largely in line with most of the regional equity markets and not a flight from the time deposits. Bonds were firm as well, but again, nothing unusu…
Taiwan News Taiwan News Reviewed by magonomics on November 11, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

The Bearish Case for Sterling

November 10, 2009
Sterling has been resilient today in the face of the Fitch warnings of the UK's rating vulnerability and the deterioration on the trade front. Supporting it has been reports suggesting that Norway's petroleum fund is looking favorable at some UK property investments and M&A related activity. There are of course some large investment ho…
The Bearish Case for Sterling The Bearish Case for Sterling Reviewed by magonomics on November 10, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Taiwan Takes A Step in Brazil's Direction

November 10, 2009
Taiwan's Financial Supervisory Commission announced that effective immediately foreign investors were banned from parking funds in time deposits. Moreover foreign investors cannot extend their existing time deposits when they mature. The ostensible reason for the ban is to curb currency speculation, according to officials. As of the end of Oct…
Taiwan Takes A Step in Brazil's Direction Taiwan Takes A Step in Brazil's Direction Reviewed by magonomics on November 10, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

US Refunding

November 10, 2009
It is difficult to envision today's $25 bln 10-year Treasury note sale to be as well received as yesterday's 3-year offering. Indirect bidders, which includes but is not limited to foreign central banks took down 68.5% compared with an average of 45.3% over the past ten auctions. The bid-cover, which is a metric of demand, was 3.33. Demand…
US Refunding US Refunding Reviewed by magonomics on November 10, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Inflation Expectations or What?

November 09, 2009
There is much talk today about what appears to be rising inflation expectations in the U.S. There are several market indicators that are capturing people's attention today.
First the yield curve, measured by the difference between the 2 year yield and the 10-year yields stands near 262 bp, having risen now 21 bp over the past month. Second, th…
Inflation Expectations or What? Inflation Expectations or What? Reviewed by magonomics on November 09, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Look To Buy Euro Vs. CZK

November 09, 2009
The euro has slumped around 4% against the Czech koruna since November 2nd. The news stream from Czech Republic has not been that supportive, giving the impression that koruna is being lifted by generalized factors.
Look To Buy Euro Vs. CZK Look To Buy Euro Vs. CZK Reviewed by magonomics on November 09, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

China Data on Tap

November 09, 2009
A flurry of Chinese data will be reported in the next 12-24 hours. The general picture that will be depicted by the data is of an economy that continues to recover from the global financial and economic shock of last year. There are three elements that will command the market's attention: inflation data, exports and new yuan loans.
China Data on Tap China Data on Tap Reviewed by magonomics on November 09, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Japanese Foreign Reserves Rise

November 09, 2009
Japan's foreign reserves stood above $1 trillion in October for the 12th consecutive month. Reserves rose a little more than $4 bln over the course of the month. This largely reflected valuation adjustments. The euro rose roughly a cent against the dollar, and this is partially offset by the decline in asset (bonds) prices. Also in terms of va…
Japanese Foreign Reserves Rise Japanese Foreign Reserves Rise Reviewed by magonomics on November 09, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Breaking Up is Hard To Do

November 06, 2009
The financial crisis is usually dated as of mid 2007, but officials did not appear to coordinate an international response until Lehman’s failure sent shock waves through the global financial system a little more than a year later. And even then it seemed like officials acted in concert, like slashing interest rates rather than pursuing a coordina…
Breaking Up is Hard To Do Breaking Up is Hard To Do Reviewed by magonomics on November 06, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Liquidity Ample--Music Playing, Risk On

November 05, 2009
This week's rash of central bank meetings have concluded. And the take away message is that the major central banks have not begun to remove the extraordinary liquidity provisions. And even in Australia, which hiked rates for the second time, seem to be signalling a gradual approach.
Liquidity Ample--Music Playing, Risk On Liquidity Ample--Music Playing, Risk On Reviewed by magonomics on November 05, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

New Initiative from Brazil?

November 05, 2009
Media reports are playing up local press stories that Brazil officials are evaluating additional measures to slow capital inflows which are driving the Brazilian real higher. The 2% tax may have led to some greater volatility in the currency, but net-net the currency remains firm. Other ideas being considered include the government selling a BRL d…
New Initiative from Brazil? New Initiative from Brazil? Reviewed by magonomics on November 05, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

More Thoughts on Brazil's 2% Transaction Tax

November 04, 2009
Investors continue to grapple with the 2% front-end tax BRL purchases for bond and equity investments. One might expect that the efficiency of the market is such that arbitrage will keep the ADR in line with what one would pay for the local shares. This does not seem to be the case, making the ADR a potentially viable alternative to the local shar…
More Thoughts on Brazil's 2% Transaction Tax More Thoughts on Brazil's 2% Transaction Tax Reviewed by magonomics on November 04, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

European Bond Update

November 04, 2009
There are three main stories to be aware of in the European bond market today.
First, Fitch cut its Irish bond rating of AA+ to AA-, citing widening fiscal shortfall and the rising cost of the financial support programs. S&P and Moody's had reduced Ireland's sovereign rating earlier this year, but the Fitch move puts its rating one not…
European Bond Update European Bond Update Reviewed by magonomics on November 04, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

New EC Forecasts--a bit more optimistic than the IMF

November 03, 2009
The European Commission released new forecasts earlier today that generally upgrade its outlook, the first time in two years. On Thursday the ECB staff will provide updated forecasts as well.
The EC now expects the euro zone economy to expand by 0.7% next year. Previously it though the region's economy would contract by 0.1%. The IMF is less s…
New EC Forecasts--a bit more optimistic than the IMF New EC Forecasts--a bit more optimistic than the IMF Reviewed by magonomics on November 03, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Q4 US Borrowing Slashed

November 02, 2009
Late yesterday the US Treasury announced a dramatic cut in its anticipated borrowing requirements for this quarter. The net borrowing is expected to now be near $276 bln. This is down by almost half (43%) from the previous estimate of $486 bln.
Q4 US Borrowing Slashed Q4 US Borrowing Slashed Reviewed by magonomics on November 02, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

RBA Kicks Off Central Bank Meetings

November 02, 2009
The Reserve Bank of Australia is widely expected to hike rates early Tuesday. This would be the second move in the cycle. A Bloomberg survey found 18 of 22 expect a 25 bp hike while the remaining four expect a 50 bp move. We are inclined to be part of the majority here, believing that fragility of the global recovery and strength of the Australian…
RBA Kicks Off Central Bank Meetings RBA Kicks Off Central Bank Meetings Reviewed by magonomics on November 02, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Iceland Scales Back Capital Controls

November 02, 2009
Effective today, Iceland lifted restrictions on capital outflows. New investors can now exchange their holdings for foreign currencies, provided the transactions are duly registered.
Iceland Scales Back Capital Controls Iceland Scales Back Capital Controls Reviewed by magonomics on November 02, 2009 Rating: 5
Subscribe to: Posts ( Atom )
Powered by Blogger.