Europe

By Win Thin Malaysia central bank surprised the markets by hiking the statutory reserve requirement 100 bp bp while leaving policy rates unchanged at 2.75%. The bank noted that “While the stance of monetary policy is expected to remain…

By Claus Vistesen I recently asked my readers whether the global economy is in for inflation, deflation, or stagflation. Given that it may well be all three at different points in time, it seems as if recent market action suggests that…

By Marc Chandler The market continues to digest the meaning and implications of Moody's decision to cut Spain's rating to Aa2 from Aa1. The two main considerations behind Moody's decision is that the cost to restructure the banks will be…

BBH CurrencyView Highlights The US dollar is stronger, benefitting in part from euro weakness as the sovereign debt returns to the fore and geopolitical tensions linger. The euro fell to the lowest level in a week, down three of the…

By Marc Chandler The newly created European Banking Authority will be overseeing the stress tests on almost 90 European banks. Recall that the stress tests last year met broad criticism for the lack of rigor. It was anticipated that the…

There have been two main surprises this year. The first is how the jasmine revolutions in MENA. It is one thing to recognize the fragility of those ancient regimes, it is another thing to watch a number of government's collapse. The second…

Portugal does not appear to have had the boom that Ireland and Spain had. Portugal's problem is the chronic grind loss of competitiveness due to high costs and low productivity. We note that Portugal's latest inflation reading of 3.6% in…

The three notch downgrade of Greece from Ba1 to B1 by Moody’s was a bit surprising, even to jaded followers of rating agency behavior. While we have remained negative on the country, is it really as bad off as Mongolia, Sri Lanka, Belarus,…

It appears the foreign exchange market is being driven by one overriding consideration and that is that the ECB is going to raise rates as early as next month. The debt crisis on the periphery has been ignored. Fitch cut the outlook for…

It looks so easy. Risk on and risk off. When risk trades are being put on, equity market and commodities prices, like gold and oil, rise. The euro appreciates and the yen sells off. When risk trades come off, just the opposite takes place.…