Happy now? European Central Bank cuts rate of monthly bond purchases but extends program–maybe for a really long time
The European Central Bank today extended its bond-buying program to the end of 2017 but cut the monthly purchases to 60 billion euros from 80 billion euros. That would take the total for this quantitative-easing effort to 2.2 billion euros ($2.4 billion.) That will...
In Italy Renzi’s constitutional referendum doesn’t just lose; it gets destroyed
The preliminary count at 3:14 a.m. in Rome (9:14 p.m. in New York) shows Italian voters rejecting Prime Minister Matteo Renzi’s referendum on constitutional change by an almost 60/40 margin. If Renzi’s proposals had lost by a narrow margin, he might have...
Rampaging dollar puts pressure on emerging market currencies and central banks
Yesterday, November 17, Mexico’s central bank raised interest rates for the fourth time in 2016. The new rate of 5.25% is the highest since 2009. The Mexican peso traded today, November 18, at 20.5626 to the dollar as of 2 p.m. New York time. And that’s just one...
3 moves for a vulnerable market
If this market is vulnerable, what should I do? I’ve been asked that question repeatedly since I first called this market vulnerable back in my October 11 post “Suddenly U.S. stocks seem vulnerable.” To answer that–the what should I do...
Economy and financial markets point in different directions ahead of Wednesday’s Fed meeting
Pity the poor Federal Reserve. In making decisions about interest rates–in this case about whether or not to raise interest rates at its June, July or September meetings–it has to consider the condition of both the real economy and the financial markets. And right now...
UK voters decide to leave European Union–What’s next (Part 1 short term effects)?
By a surprisingly large margin of 52% to 48% the United Kingdom voted to leave the European Union in Thursday’s Brexit referendum. Global financial markets plunged in a decline all the more dramatic because traders and investors had decided on Wednesday that the...The holiday is over for the euro–and it's back to crisis time.
The euro crisis has got as many heads as the Hydra. This week bring another involving Portugal. Last week the euro started falling again—it closed at $1.2907 on Friday but rallied slightly to $1.2951 today—and yields on Portuguese government debt moved up—the 10-year...Inflation enters dangerous territory in the European Union–and I don't see it stopping here
Talk about getting caught between a rock and rocking the entire European Union. Inflation kicked up to an annual rate of 2.2% in December in the European Union. That’s well above the European Central Bank’s oft-stated target of an annual rate “close but below” 2%. In...The euro crisis isn't bad for Germany's export economy–projections call for 3.5% growth in 2010
Germany’s economy continues to motor ahead even while much of the rest of the Eurozone struggles to show any growth at all. Think that might explain a bit of the anger and resentment directed by some of its neighbors at Germany’s hard-nosed position on enlarging the...Biggest European banks about $350 billion short of Basel III capital
More bad news for European banks in the latest report from the folks charged with setting up the rules for the new Basel III rules for global banking. First, some good news. Regulators have calculated that the 94 biggest banks in the world would be about $770 billion...Left to fight alone, the European Central Bank doubles its ammo
The euro debt crisis takes another bite at Spain and expands to Belgium. But German opposition to a bigger bailout fund has left the European Central Bank to fight the problem alone. So, prudently, the European Central Bank has decided to raise more capital. Today,...They need how much? Eurozone economies face their biggest refinancing job ever in 2011
Anyone hoping that turning the calendar page to 2011 will mean the end of the euro debt crisis can’t take any comfort in these numbers: Eurozone countries will have to refinance or repay $740 billion in 2011, according to Italian bank Unicredit. That’s roughly $60...Well that sure worked–the euro debt crisis moves to Spain and intensifies
The financial markets have started to do the math they should have done six months ago, and they don’t like what they’re seeing: The European Union’s much vaunted financial backstop fund might not have enough money to rescue Spain, the numbers argue. That’s because...Dollar rallies while the euro stumbles: Which is good for some stocks
The U.S. dollar keeps running higher as the euro stumbles. With financial markets unconvinced that the Irish bailout will put an end to a euro debt crisis that’s ready to engulf Portugal and Spain, the U.S. Dollar Index (DXY) pushed above 81 this morning for the first...Will the euro band-aids stick this time?
Another weekend, more band-aids. Will the latest round succeed in convincing financial markets that the bleeding in the euro has stopped when earlier applications have failed? The results this morning are mixed. The extent of this round is impressive. First, of...So what happened to the euro relief rally?
Ireland formally appealed for a rescue by the European Union and the International Monetary Fund on Sunday November 21. The European Union and IMF quickly agreed to the request. Irish Prime Minister Brian Cowen said he expects talks on the package to be completed in...2011 is going to be different than investors thought even a few weeks ago
Time to re-think 2011. The news of the last three weeks plus the market reaction to that news demands a rethink of investment strategy for 2011. 2011is going to be a lot less linear, a lot more volatile—if not necessary more or less profitable– than I thought it...With no strong trend out of today's market, stocks hang on tomorrow's news flow
Bounce or rally? We still don’t know. The U.S. stock markets started with a strong bounce this morning. The Standard & Poor’s 500 index moved up 1.1% off the starting line. Key was “news” from Europe that suggested Ireland might be closer to a rescue deal. That...The Euro Zone gets desperate to push Ireland into a bailout deal
Take this bailout money, please. The European Union is so anxious for Ireland to take a bailout package that it’s offered to sweeten the deal. The Irish government so far has said it doesn’t need a bailout yet since the government debt is funded through mid 2011. And...Even before the Fed acts, the long bond is signalling rising inflation worries
Something odd is happening in the bond market on the way to the Federal Reserve’s second program of quantitative easing: Interest rates at the long end of the Treasury market have started to rise. From one perspective this is counter-intuitive. The Fed is about to...Stock markets get the election jitters–and not just in the U.S.
It’s election season. No, no. I don’t mean just in the United States. You don’t need me to point out that your neighbor’s lawn is festooned with Vote for … signs. Or that TV is plastered with Don’t vote for… messages. Or that your inbox is full of “Contribute to…...Now it's Ireland's turn to rattle the euro
The Irish crisis keeps getting deeper—at least as judged by spreads on Irish government bonds. Yields on Irish government bonds hit records on Tuesday, September 28. The yield on the 10-year government bond climbed by 0.25 percentage points on the day to 6.72%....Now it' Spain's turn to depress the euro
More worries for the euro. This time from Spanish politics. Prime Minister Jose Luis Rodriguez Zapatero has set a September 30 deadline for announcing his government’s budget plan. Investors want to see a combination of taxes and spending that reduces Spain’s budget...Don't get too excited about the euro: Greek crisis still isn't over
Almost a year after the Greek government admitted it had lied about the size of its budget deficit and national accounts, setting off the euro crisis, and four months after a $140 billion bailout “solved” the Greek crisis the European Union still doesn’t trust Greek...The return of worries about the PIIGS weighs on the euro
Good news: Ireland isn’t Greece. Bad news: Ireland isn’t Spain, either. At least that’s what Standard & Poor’s concluded on August 25 when it cut the credit rating on Ireland’s sovereign debt one step to AA-. S&P is worried that the cost of re-capitalizing...Euro (central bank) politics kill the euro rally–dead
If this is what a euro hawk is saying now, the European Central Bank will be in the emergency lending business well into 2011. That would match the U.S. Federal Reserve’s recent promise (most recently from Fed chairman Ben Bernanke today, August 27) to continue its...Hungarian budget goulash signals next phase in euro crisis
Hungary’s budget crisis isn’t large in size in comparison to those of Greece or Spain, but Hungary’s crisis is a harbinger of the next crisis euro debt crisis. Hungary’s budget crisis raises the question What happens when a country reaches a bailout agreement with...Narrowing down the list of Europe's troubled banks
More details and better projections on the European bank stress test and what banks are likely to fail the test. The smaller than expected demand—just $162 billion–for 3-month loans from the European Central Bank shows, I think, that the European banking sector...Germany will stress test its most troubled banking sector–by mid-month we'll know how big the problem at the Landesbanks is
At least we’ll know how bad it is. That’s my reaction to news that Germany will extend its bank stress test to its Landesbanks. These banks, owned by the country’s state governments, are thought to be the most exposed to risky debt and the most undercapitalized of the...Jim’s Daily Email Alerts:
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