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Special Reports |
Written by ActionForex.com |
Feb 04 10 15:07 GMT |
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As expected, the ECB kept its main refinancing rate unchanged at 1%. The introductory statement was very similar to the one released 3 weeks ago. The central bank believed current rates remain appropriate and risks to economic outlook are broadly balanced. Same as previous months, upside risks to economy include more-than-expected improvement in confidence, stronger-than-expected recovery in world economy and foreign trades as well as strong-than-expected impacts of macroeconomic stimulus. On the downside, concerns remain relating to a stronger or more protracted than expected negative feedback loop between the real economy and the financial sector, renewed increases in oil and other commodity prices, the intensification of protectionist pressures and the possibility of a disorderly correction of global imbalances. Moreover, the ECB anticipates bank lending will deteriorate further. |
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Special Reports |
Written by ActionForex.com |
Feb 03 10 08:48 GMT |
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The ECB will most likely announce to keep the main-refinancing rate at 1% at the meeting Thursday. Although economic recovery remains on track, there have been signs showing that the growth is losing steam. Therefore, there's no urgent need for the central bank to unwind its policies other than the non- standard ones. |
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Special Reports |
Written by ActionForex.com |
Feb 03 10 06:56 GMT |
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The SNB was one of the most aggressive central banks in implementing loose monetary policies to fight against the recent recession. Between October 2008 and March 2009, the SNB has reduced the 3-month LIBOR target rate by 250 bps to 0.25%. In March, the central bank also announced a series of liquidity provision programs including additional repo operations and purchases of Swiss franc bonds issued by private sector borrowers. The central bank also declared to purchase foreign currency on the foreign exchange market so as to prevent any further appreciation of the Swiss franc against the euro. |
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Special Reports |
Written by ActionForex.com |
Feb 02 10 05:58 GMT |
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There are several reasons triggering the RBA to pause monetary tightening, in spite of strong domestic data and the 2-month break since the last meeting. Chinese authorities are now seeking to reduce the degree of stimulus to their economy and this may affect economic development in Australia. At previous meetings, the RBA stated 'growth in China has been very strong, which is having a significant impact on other economies in the region and on commodity markets'. As Australia and China are close trading partners, tightening in China may increase concerns over a temporary slowdown in Australia's growth. |
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Special Reports |
Written by ActionForex.com |
Feb 01 10 09:08 GMT |
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We expect the RBA to increase its policy rate by 25 bps to 4% on February 2, the central bank's first meeting in 2010. This will be the 4th rate hike by the RBA after it had taken the cash rate to 3% in April 2009. Rise in domestic price pressure and surge in housing prices are major forces triggering the RBA to tighten further. |
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Special Reports |
Written by ActionForex.com |
Jan 29 10 15:11 GMT |
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4Q09 GDP expanded +5.7% qoq (annualized) , compared with market expectation of +4.7%, from +2.25 in the previous quarter. The growth was the strongest since 3Q03 and was mainly driven by inventories which contributed 3.4% to the headline gain. It's a good news that inventory declined at a significantly lower than last quarter, rather than outright accumulation. |
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Special Reports |
Written by ActionForex.com |
Jan 28 10 05:03 GMT |
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As expected, the RBNZ left the OCR unchanged at 2.5%. The accompanying statement was a short one as much uncertainty about recovery was removed. Also, the central bank reiterated December' stance that removal of policy stimulus will start around the middle of 2010 if the economy continues to recover. |
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Special Reports |
Written by ActionForex.com |
Jan 28 10 03:56 GMT |
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The January FOMC statement showed slightly more hawkish tone on economic growth though the overall stance remained unchanged – the Fed funds rate will be kept at 0-0.25% and 'economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period'. Kansas City Fed President Thomas Hoenig's dissent to keep the 'extended period' phrase was also surprising and signaled there might more hawks appearing later this year. |
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Special Reports |
Written by ActionForex.com |
Jan 27 10 09:19 GMT |
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Narrowing of US-Japan yield gap and the 'laissez-faire' stance of the Japanese government were the main reasons accelerating Japanese yen's rally against the dollar in 2H09. 3-month LIBOR for USD-denominated loans has been trading been below that of yen-denominated loans since August 24 while USDJPY plummeted to as low as 84.82, a level never seen after 1995, in November. Not until a stronger-than-expected November employment report in the US which spurred speculations of an earlier (by June) Fed rate hike had the dollar rebounded against the yen. However, the yen remains strong compared with historical average. |
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Special Reports |
Written by ActionForex.com |
Jan 25 10 08:35 GMT |
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The Fed is expected to keep the policy rate unchanged at 0-0.25% at the January meeting. While there have signs showing improvement in economic outlook, job markets remained the area the Fed concerned the most. The number of payrolls unexpectedly plunged -85K in December, compared with consensus of no change from November, while the unemployment rate stayed at 10%. The Fed will wait until unemployment rate has dropped substantially before considering rate hikes. |
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Special Reports |
Written by ActionForex.com |
Jan 21 10 16:21 GMT |
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Since January 2007, the pound has dropped -23.5% against its major trading partners with the decline against the euro slightly more than that against the dollar. Although the pound managed to gained against most of these partners in 2009, much of the return was erased in the second half of the year as BOE committed to adopt extremely loose monetary policies and economic contraction was more serious than previously anticipated. |
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Special Reports |
Written by ActionForex.com |
Jan 20 10 11:22 GMT |
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The BOE minutes showed that members voted unanimously to keep the policy rate unchanged at 0.5% and the asset purchase program unchanged at 200B pound. While economic activities have been recovering since the previous meeting, there’s still risk that the inflation will undershoot the 2% target. |
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Special Reports |
Written by ActionForex.com |
Jan 19 10 15:33 GMT |
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The Bank of Canada kept the overnight rate unchanged at 0.25% and pledged to keep it at current level until the end of the second quarter of 2010 in order to achieve the inflation target. Concerning economic development, the central bank believed strong Canadian dollar will continue to dampen activities in Canada. In 2010, the growth driver will mainly come from domestic demand which relies on private sector. |
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Special Reports |
Written by ActionForex.com |
Jan 18 10 10:37 GMT |
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In the upcoming meeting on January 19, the Bank of Canada will likely keep the overnight rate unchanged at 0.25% and reiterated the monetary stance will remain 'until the end of the second quarter of 2010 in order to achieve the inflation target'. The 2 key issues that policymakers are monitoring are the housing market and household indebtedness. Existing home sales surged to a record level of 46805 units, up +40% yoy, in December while average price rose +19% yoy to 337410 Canadian dollar. The strong readings were driven by low mortgage rates. |
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Special Reports |
Written by ActionForex.com |
Jan 14 10 15:30 GMT |
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As expected, the ECB meeting offered no surprise to the market on both economic outlook and monetary policy. The central bank kept the main refinancing rate at 1% and stated current interest rates are ‘appropriate. Moreover, the Eurozone’s economy will expand at a ‘moderate’ pace while inflation outlook remains subdued. |
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Special Reports |
Written by ActionForex.com |
Jan 14 10 03:44 GMT |
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Federal Reserve Bank of Philadelphia Wednesday released the Beige Book based on information collected in late November through January 4, 2010. 10 out of 12 districts showed economic improvement in the reporting period, suggesting a broadening of recovery. However, over improvement remained at low level compared with pre-recession level in 2007. |
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Special Reports |
Written by ActionForex.com |
Jan 13 10 13:09 GMT |
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The ECB is expected to keep the main refinancing rate unchanged at 1% in January. After announcing some liquidity withdrawal measures at the December meeting, the upcoming meeting will likely be a quiet one. President Trichet should describe current interest rates as 'appropriate' and the outlook for growth and inflation 'moderate' with 'broadly balanced' risks to both sides. As Greece is currently preparing the stability program to reduce budget deficit, we expect this will be the focus of the press conference today. |
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Special Reports |
Written by ActionForex.com |
Jan 12 10 11:15 GMT |
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In the near-term, we see further upside for the euro against the dollar as strong global economic recovery and a broad-based low interest rate environment continues to favor 'higher-yield' assets. Moreover, the disappointing US non-farm payrolls in December evaporated much speculation about an early Fed tightening. Renewed weakness in USD, after a strong recovery in late-2009, should persist for a few months before favorable data emerge again. |
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Special Reports |
Written by ActionForex.com |
Jan 08 10 09:43 GMT |
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After strong rallies in 2008 and early 2009, USD peaked in March. In order to combat the worst recession since the World War II, the Fed reduced the policy rate to an unprecedentedly low level and implemented a series of quantitative easing policies. The 'twin deficits' problem (current account and fiscal deficits) has put USD's status as the reserve currency at risks and triggered investors to dump the currency. Worries about the dollar's future as well as increase in risk appetite as global economic outlook recovered later in 2009 brought the greenback to extremely low levels. |
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