Australian dollar

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Macro Morning: Fed caps stocks

It was a big night for currencies and commodities but there is a real risk now for stock bulls that the FOMC just put a lid on the recent rally. The FOMC Minutes which came out at 1700 GMT or around 6am Sydney time and showed a recognition that the flow of easy money can

0

Macro Morning: German hope rocket

Stocks were driven higher by the much better than expected ZEW sentiment survey in Germany with a big bounce from 31.5 to 48.2 this month for a much better result than the 35 the punditry were expecting. The Eurowide ZEW survey was equally amazing coming in at 42.4 from 31.2 last. How business sentiment has

34

RBA & Treasury push for higher Australian dollar

The new and outspoken RBA board member, Heather Ridout, yesterday added the RBA’s voice to keeping the dollar elevated. From the AFR: “The Japanese election and statements by politicians had contributed to a significant depreciation of the yen since November.” Fair enough. We all know that the jawbone is a powerful tool for the senior

0

Macro Morning: Silent night

A boring a night for stock investors with the US out and Europe a bit mixed. The FTSE fell 0.16%, the DAX was up 0.47%, the CAC rose 0.18% while Milan and Madrid both slid 0.51%. The Italian elections are coming up fast so that might be a cause of market angst again soon depending

21

Industry policy cannot offset the Australian dollar

The Gillard government has released its new industry policy blueprint and it looks reasonable enough. Although Business Spectator gives it a caning, more even-handed analysis is available from Peter Roberts at the AFR: The extra $350 million to support innovation investment funds (IIFs) is a bold recognition that there remain market failures in our venture

1

Macro Morning: Walmart crash

Friday night was mixed with UK retail sales tanking 0.6% versus an expectation of a rise of 0.4% in January. US industrial production was also weaker than expected falling 0.1% in January against an expectation of a rise of 0.2% but the New York State Empire manufacturing survey was up sharply  to 10 from -7.78 last

1

Macro Morning: GDP whacks euro

Terrible numbers out of Europe overnight and likewise weak growth in Japan so as Houses and Holes posted earlier much of the world shrank in Q4 2012. Certainly the Japanese weakness was unsurprising but the data out of Europe, particularly Germany, was truly disquieting and suggests that the ECB will need to ease and if a

1

Macro Morning: Golden crumble

Early strength in European stocks and the euro gave way in US trade overnight and gold is breaking lower once again. Interesting last 24 hours in markets with the S&P hit 1525 for the first time since 2007 but reversed to sit lower at present. Euro was stronger initially after comments from the Russian Finance Minister which

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Swan jawbone blasts Australian dollar higher

Wayne Swan really needs to learn how to make better use of the Treasurer’s jawbone. The AFR story that I covered this morning about Swan’s commitment to market-based currencies last night coincided with a surge in the Aussie of about three-quarters of a cent. I’ve circled the impolitic moment: Now, maybe it would have happened

8

The Australian dollar tells a naive truth

From the AFR today: Treasurer Wayne Swan has declared Australia’s support for letting financial markets determine exchange rates, amid rising unease about a global currency war. Mr Swan’s move adds Australia’s voice to those of other leading nations concerned that countries are actively devaluing their currencies to boost exports and growth. In an attempt to calm

5

Demand for Australian government bonds falls

Adding to the weakening Australian dollar meme, ANZ has a note out discussing weakening (although still strong) demand for Australian government bonds. The recent fall in Australian bond tender bid/cover ratios reflects a small softening in safe-haven demand, increased credit issuance, and investor preference for riskier assets. We think demand for ACGBs will be upheld and further continued weakness

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Volunteering to be Europe

Stephen Bartholomeusz of BS wrote late yesterday that: While it will be overshadowed by Julia Gillard’s nomination of the date for the next federal election, her comments on the Australian dollar occupied a meaningful slab of her address to the National Press Club today, indicating that the continuing strength of the currency is a front-of-mind

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Australian dollar leaps on BOJ disappointment

It may be hard to believe but the Bank of Japan just disappointed markets with its announcement that it target 2% inflation and print another $2 trillion Yen to buy everything in sight. From Bloomie: The Bank of Japan set a 2 percent inflation target and said it will shift to Federal Reserve-style open-ended asset purchases in

19

Print or be damned, Capt’ Glenn

Yesterday Capt’ Glenn of the RBA got a lot of international press for his utterances blaming profligate central banks and their printing habits for undermining the division between fiscal and monetary policy and driving up the dollar. From Sober Look: RBA’s Governor, Glenn Stevens today took a jab at the four major central banks (Fed, BOJ, EBK,

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When waning Aussie bond enthusiasm is not enough

Cross posted from FTAlpahaville The Reserve Bank of Australia cut its cash rate on Tuesday to 3 per cent — making a total of 175bps worth of cuts since November 2011, and bringing the rate to its lowest level since the depths of the financial crisis. The RBA’s governor’s statement alluded to the bank’s discomfort over the stubbornly high

15

Swiss pile into Australian dollars

From Bloomberg comes the news that the Swiss are buying Australian dollars as a part of an explicit mercantilist strategy: The Swiss central bank pledged to keep defending its franc cap and left borrowing costs at zero to protect the economy from “exceptionally high” risks as the euro area’s crisis intensifies. …The central bank, which

15

Azerbaijan helps itself to some Australian dollars

From the WSJ: Azerbaijan, the Caspian nation best known for its caviar and petroleum, is buying Australian government bonds, joining a growing list of sovereign investors acquiring debt Down Under in a trend that has seen the Aussie dollar labeled a potential safe-haven currency by the International Monetary Fund. The former Soviet republic’s US$33 billion