Tag Archive: Federal Reserve
“It begins”: The rise of the digital dollar
In mid-November, while the whole world was focused on the Ukraine crisis, the US midterms or whatever other “big story” the media decided was more important, a truly momentous shift took place in the global financial system. It might seem like a small step on the surface, but it has the potential to bring about a real and possibly irreversible sea change in the way we use money; or better said, the way it uses us.
As Reuters reported on the...
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Johnson Resigns, but Still not Clear if He Controls the Timing
Overview: The resignation of a UK prime minister makes for high political drama, but the markets hardly moved on it. Sterling, like most of the major currencies, are recovering against the dollar today.
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No Turn Around Tuesday
Overview: The global capital markets are calm today. Most of the large bourses in the Asia Pacific extended yesterday’s gain. Europe’s Stoxx 600 is advancing for the third consecutive session and is near two-and-a-half week highs.
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Johnson’s Ability to Lead Tories into Victory at Risk with Today’s By-Elections
Overview: Asia Pacific equities were mixed. Gains were recorded in China, Hong Kong, Australia, and India, among the large markets, while Japan was mostly flat and South Korea and Taiwan shares fell.
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FX Daily, March 17: Investors are Skeptical that the Fed can Achieve a Soft-Landing. Can the BOE do Better?
Overview: The markets continue to digest the implications of yesterday's Fed move and Beijing's signals of more economic supportive efforts as the Bank of England's move awaited. The US 5–10-year curve is straddling inversion and the 2-10 curve has flattened as the Fed moves from one horn of the dilemma (behind the inflation curve) to the other horn (recession fears). Asia Pacific equities extended yesterday's surge. The Hang Seng led the...
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FOMC Sets New Course
The Fed delivered what it was expected to do: double the pace of tapering and project a more aggressive interest rate response with its individual forecasts. The dollar initially rallied on the headlines, and new sessions highs were recorded, but the price action was a bit of a head-fake, as it were. The greenback's gains were quickly pared, though it remained above JPY114 ahead of Chair Powell's press conference. The market had already...
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Central Bank Fest
Next week is the last big week of the year, and what a week it will be: Five major central banks meet and at least nine from emerging market countries. Norway's Norges Bank is the most likely major central bank to hike its key (deposit) rate (December 16). It would be the second hike of the year. The economy is enjoying a solid recovery, and headline inflation rose to 4.6% in November, its fastest pace since 2008. The underlying rate, which...
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Covid Wave Knocks Euro Down and to new 6-year Lows Against the Swiss Franc
Overview: Concerns about the virus surge in Europe cut short the euro's bounce and sent it back below $1.1300 and are also weighing on central European currencies, including the Hungarian forint, despite yesterday's aggressive hike of the one-week deposit rate. Austria has reintroduced a hard 20-day lockdown. Germany's health minister warned that the situation deteriorated and vaccines were not enough to break the wave. He was explicit that a...
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US Retail Sales and Industrial Output to Accelerate; China not so Much
At the halfway point of Q4, the markets' focus is on three things: inflation, growth, and central banks' response. With US and Chinese October inflation readings behind us, the focus shifts to the real economy's performance, the world's two largest economies reporting retail sales and industrial production figures. Helped by stronger auto sales, the first increase in six months, US retail sales likely turned in another solid showing of around...
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FX Daily, November 9: Falling Yields Give the Yen a Boost
Overview: Reports that the Fed's Brainard was interviewed for the Chair helped soften yields a bit, not that they needed extra pressure, on ideas she is more dovish than Powell. In turn, the lower yields saw the yen rise to its best level in nearly a month and led the major currencies higher against the dollar.
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US Employment Data is Important but for the Millionth Time, Don’t Exaggerate It
Overview: Record high closes yesterday for the S&P 500 and NASDAQ have done little to help global equities today. Most of the Asia Pacific region markets, but Japan and Australia slipped ahead of the weekend while still holding on to gains for the week.
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Quantitative Easing: A Boon or Curse?
Central banks’ massive Quantitative Easing (QE) programs have come under scrutiny many times since the central banks fired up the printing press and began quantitative easing programs en masse after the 2008-09 Great Financial Crisis.
However, the increase in central bank assets due to quantitative easing programs during the crisis pale in comparison to the QE programs during the Covid pandemic.
As economies recovered after the...
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Is Central Banks’ License to Print Money About to Expire?
2022-10-29
by Stephen Flood
2022-10-29
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