Currencies Archive

Calories, Capital, Climate Spur Asian Anxiety

Higher oil prices mean lower rates from the Fed, and higher inflation rates induced by shortages mean stronger currencies abroad. Why do I have so much trouble getting aboard this paradigm, and instead keep looking for reversals? Feels a lot like watching the NASDAQ go from 3500 to 5000 a few years ...Read More

Italian budget deficit down towards 2%

Falling deficits in general in the Eurozone due to the growth rate of GDP combined and the countercyclical tax structure. Aggregate demand from non government credit expansion (and some from exports) is supporting GDP as support from government deficit spending wanes. This can go on for quite a while as consumer leverage ...Read More

SOV CDS

From: ABNAMRO CREDIT SALES (ABN AMRO) At: 12/20 5:18:53 10YR 5YR BELGUIM 19/21 11/15 FRANCE 10/12 6/9 GERMANY 8/10 4/7 GREECE 29/31 22/24 ITALY 29/31 21/23 PORTUGAL 26/28 20/22 SPAIN 25 1/2/27 1/2 19/21 UK 9/11 5/8 USA 8/11 5/8 In the Eurozone, it’s probably the case that if one goes, they ...Read More

ECB offers unlimited cash

Good to see the ECB seems to understand it’s about price and not quantity. The reporter isn’t quite there, however. Maybe when the smoke clears and it turns out no net euros are involved the financial press will get it right. Or maybe they will accuse the ECB of ‘tricking the markets’ ...Read More

Re: credit recap

(an interoffice email) > > > > Mkt did not like the Fed move today- IG9 went from 70 out to 78.75 after the > news. CMBS cash (which had a roaring spread tightening in the morning of > about 15bp) gave all but 6bp of it back. There was a rumor ...Read More

Dec 11 balance of risks update

Labor markets remain stronger than expected, right up through this morning’s Manpower survey for next quarter. Inflation risks remain elevated, with estimates of 1.5% PPI and 0.6% CPI the consensus for Thursday and Friday, and CPI core moving higher as well. While several funding spreads have widened vs. fed funds, absolute rates ...Read More

China’s export prices

Checked with our China economist, it appears that China’s export price has been rising since early 06. Compared to the price by end of 06, export prices are already 7.4% higher (See charts attached)-an interoffice email While headlines focus on China’s internal inflation issues, more relevant to the fed are China’s export ...Read More

Fed expected to lower rates despite raging inflation – MarketWatch

And the risk is headlines could get much worse after they cut. For example: ‘Oil prices rise as Fed rate cuts drive down the dollar’ ‘Fed cuts rates, driving up gas prices, to bail out banks’ MarketWatch article – Fed expected to lower rates despite raging inflation ...Read More

Bowling alley to run out of points!

National Debt Grows $1 Million a Minute The Associated Press Monday 03 December 2007 Washington – Like a ticking time bomb, the national debt is an explosion waiting to happen. It’s expanding by about $1.4 billion a day – or nearly $1 million a minute. What’s that mean to you? It means ...Read More

Strong $ AND strong yuan?

Reminds me of the guy who loves money and wants to abolish taxes. I do think the push is now for a stronger $, however, and we’ll see tomorrow if the Fed is on board. As a friend of mine pointed out, a firming $ will likely trigger domestic and international portfolio ...Read More