This week, three G-7 central banks had meetings and all decided to CHECK and leave policy unchanged. This was widely expected as there was little reason to UPSET the incoming Biden administration with any idea of currency manipulation. However, the Bank of Canada, Bank of Japan and European Central Bank all discussed the fear of a further slowdown from an increased spread of covid-19.
Posts Tagged ‘Canadian Dollar’
Notes From Underground: Central Bank Poker
January 21, 2021Notes From Underground: The Sun Will Come Out Tomorrow
January 19, 2021Say goodbye to Daddy Warbucks Say hello to Uncle Joe.
On Monday we got a preview of the Biden Administration as Treasury Secretary nominee Janet Yellen appeared before the Senate Finance Committee. It was sad that her testimony was released over the weekend. There were the stock answers to the issue of the U.S. dollar, which falls under the auspices of the Treasury Department. Yellen proclaimed that the markets would set the value of the DOLLAR and that it would not be the policy of the Biden Administration to manipulate the currency to attain some illusionary trade advantage.
Notes From Underground: Central Bank Policy Peeks
June 2, 2020On Monday night, the Reserve Bank of Australia issued its policy decision and as expected, there was no change in overnight rates at 0.25%. More importantly, the RBA is targeting three-year Aussie government bonds at 0.25%, keeping the yield curve flat or inverted out to that point.
Notes From Underground: The G-7 Was All About the Dollar
March 5, 2020The other day I called question to the tepid G-7 statement, which was followed by a 50 basis point CUT from the Federal Reserve. On Thursday the Financial Times published a story saying the Fed’s move was counter to a history of G-7 collaboration. Let us first dissuade the popular mythology of the G-7 as relevant to any serious global action. The colonial remnants of the authority of the bailiwick of the mechanism for the containment of the Soviet Empire are a JOKE. During the financial crisis it was the moves made by China that did more to stabilize global growth than any action by the G-7.
Notes From Underground: The Sounds Of Silence, as Sung by Hyman Minsky
October 28, 2019Equity markets on Monday sustained their global rally as markets across Asia, Europe and the United States powered higher, even as the political backdrop continues to foment greater uncertainty. This week brings three key central bank meetings: The Bank of Canada, the Federal Reserve and the Bank of Japan. (more…)
Notes From Underground: “Where Did I Find This Guy Jerome?”
September 8, 2019Of all the U.S. president’s tweets (and believe he has a lot), Friday’s tweet about Federal Reserve Chairman was one of the best. Unfortunately, there probably should’ve been a comma between “guy” and “Jerome” since one could ask the question about any member of Trump’s economic team. President Trump could be asking the Fed chairman about Secretary Steven Mnuchin, or Commerce Secretary Wilbur Ross, and certainly of Larry Kudlow or Peter Navarro. NOTES FROM UNDERGROUND has been asking that for many months. In my opinion, the only Trump pick that inspires confidence is Robert Lighthizer.
Notes From Underground: Not Such Benign Neglect for the Payrolls Report
December 9, 2018In what appeared to be a “soft” unemployment report, the equity markets discarded the traditional Goldilocks response to weaker data and spent the entire session in sell mode. That sent the S&Ps to a 4.5% LOSS for the week. The BULLS are in trouble for the market rejected what was regarded as POSITIVE news and continued the 11-week long correction. The G-20, “dovish” FED and softer data were cast aside as new negative stories, like the arrest of a significant Chinese business leader and the Mueller investigation closing in on the president. OPEC’s agreed cut in oil production sent crude oil prices moderately higher on Friday, which would have given a boost to the S&Ps as energy stocks would have been bid in past occasions.
Notes From Underground: Ball of Confusion
March 5, 2018Segregation, determination, demonstration, integration, aggravation,
humiliation, obligation to our nation
Ball of Confusion that’s what the world is today [yeah, yeah]
The sale of pills is at an all time high
young folks walkin’ ’round with their heads in the sky
Cities aflame in the summer time, oh the beat goes on
Eve of destruction tax deduction
City inspectors, bill collectors,
Evolution, revolution, gun control, the sound of soul,
Shootin’ rockets to the moon,kids growin’ up too soon
Politicians say more taxes will solve ev’rything, and the band played on.
Notes From Underground: Feeding the Ducks (Part Two)
January 10, 2018Tonight, I’d like to expound on the recent musings from Chris Whalen, titled, “Bank Earnings &Volatility.” Whalen stresses that the FED will not be selling assets but merely ending “its reinvestment of cash when securities are REDEEMED,” (emphasis mine). In what I consider a key point raised, Whalen said, “Yet as we and a growing number of investors seems to appreciate, the FED cannot force up long-term rates so long as it is sitting on $4 trillion worth of securities THAT IT DOES NOT HEDGE. More given that the Treasury intends to concentrate future debt issuance on short-term maturities, downward pressure on long-term bonds yields is likely to intensify.” Whalen also said, “What the FOMC has done to the markets via QE is essentially reduce potential volatility by holding securities and not hedging these securities.” The key point is enhanced by the fact that both the ECB and BOJ do not hedge their security exposure either so volatility has been diminished by the reduced hedging.
Notes From Underground: Feeding the Ducks When They Quack
January 9, 2018Since the unemployment data, I have tried to write an appropriate blog but “all my words came back to me in shades of mediocrity” so I refrained from adding to the stream of vapid commentary that fills the Internet. But let’s proceed as the markets provided movement based on some sense of heightened inflation expectations. There is certainly money flowing into commodity based investments as OIL, COPPER, GOLD, and a litany of other natural resources have become a repository for money concerned with investments other than crypto currencies. The U.S. employment data was well within the range of expectations. The important average hourly earnings and the average work week were close to the consensus forecasts. The Canadian data beat estimates for the second consecutive month. The consensus was for an unemployment rate of 6% and addition of 2,000 jobs. The actual data was 5.7% unemployed and almost 80,000 new jobs, with two-thirds being part-time.