currencies

Markets have been punishing countries with the weakest fundamentals, focusing on either high inflation, large current account and budget deficits, external debt loads, or a combination of these. These other vulnerability measures in the…

Sentiment continues to improve ahead of NY open off the back of possible EU bank recapitalization plan. For sentiment to continue to improve markets are likely to need a bold policy response and better economic data. Poland’s is expected…

In an interview from late September, Zulauf tells James Turk that he is very much a eurosceptic. The external imbalances in the euro zone make the euro an untenable currency union. Like David Blanchflower, Zulauf remarks how markets are…

This fiscal uncertainty may be enough to prevent any ratings upgrades ahead, but we do not think the situation will worsen enough to lead to downgrades. Our sovereign rating model has Russia as a very solid BBB+/Baa1/BBB+ credit compared to…

Global stocks continue to show heavy losses in Asia and Europe, oil & copper down; G10 mostly mixed. Euro group meeting injects more uncertainty about Greece; EUR/USD “death cross” on daily chart. RBA strikes dovish tone, AUD/USD down…

This week we will begin to examine our next topic: government spending, taxing, interest rate setting, and bond issue. We will examine fiscal and monetary policy formation by a government that issues its own currency. We will bear in mind…

The outcome of the Bank of England meeting will known first. Based on the dovish cast to the Sept BOE minutes and some recent comments, within the context of generally soft economic data, there is speculation that the BOE can resume its…

Dollar and yen maintain supportive tone amid global growth concerns; ECOFIN meet to discuss EFSF. Important week ahead with focus on data and policy; potential shifts from the ECB and BoE possible. US NFP excluding Verizon expected to…

All US government obligations are substantially identical promises to repay a specific amount of the currency unit of account backed by nothing but taxing authority. So, Treasury bonds don’t ‘fund’ anything. If the Treasury were allowed to…

Asia and European session dominated by safe haven flows; Fitch & S&P both downgrade New Zealand. Germany’s upper house and Austria vote on EFSF measures; we still feel EFSF 2.0 is still not enough. Brazil’s budget and inflation…