guest commentary

Bank Research Consensus Weekly 10-10-09

Monday, 12 October 2009 03:11:03 GMT  |  Michael Wright, Daily FX Research

A sense of cautious optimism prevails in financial markets. And the week ahead is rich in economic data that will provide further clues on the pace of improvement in global economic conditions.

Trevor Williams, Chief Economist at Lloyds TSB Financial Markets

Weekly Bank Research Center 10-12-09

 

Up but Not Tight

Spyros Andreopoulos, Joachim Fels & Manoj Pradhan, Global Economics Team, Morgan Stanley

Up down under: So, the Reserve Bank of Australia (RBA) became the first G10 central bank to hike rates in this cycle on Tuesday, following the example set by the Bank of Israel (BoI) in late August, which serves to underscore our view that, slowly but surely, the global monetary policy cycle is turning (see "As the Policy Cycle Turns...", The Global Monetary Analyst, September 30, 2009). But, interestingly, global markets didn't seem to attach much significance to this move, with risky assets continuing to rally. In fact, our updated liquidity metrics suggest that global excess liquidity has continued to grow until recently and looks set to rise further in the foreseeable future, even though more central banks look set to join the BoI and the RBA over the next several months. Still, the RBA's move offers an interesting lesson that is worth keeping in mind when thinking about other central banks' prospective behaviour in the upcoming tightening cycle: strongly rising asset prices may induce central banks to start lifting rates early from record-low emergency levels even if growth is still below-trend and inflation below-target.

 

Full Story

 

 

UK: Production spoiled the fun

Allan von Mehren, Chief Economist, Danske Bank

Most UK data surprised positively. Halifax house prices showed yet another strong monthly increase providing further evidence that the housing market is indeed bottoming out. Service PMI beat estimates and rose further to 55.3 in September from 54.1 in August signalling clear expansion in the service sector. Car registrations rose 11.4% y/y up from 6.0% y/y in August. Finally, nationwide consumer confidence surprised to the upside rising to 71 in September from 65 in August.

 

Full Story

 

 

Normalizing the Credit Markets?

John E. Silvia, Ph.D. Chief Economist, Wachovia

In recent months we have witnessed credit spread benchmarks such as the Ted spread and Libor rates dip below levels that existed prior to the Lehman collapse. In other areas we have seen both the Fed and the Bank of England purchase financial instruments such as Treasury bonds, corporate bonds and mortgage-backed and asset-backed securities.

Full Story

 

 

Canada – Giving Thanks to no Jobless Recovery

Derek Burleton, Chief Economist, TD Bank Financial Group

Canada’s employment report for September delivered some unexpected cheer this morning, uncovering a second straight healthy gain in net new positions ( +31,000) and a drop in the unemployment rate to 8.4%. It is a clear signal that job market conditions are turning for the better. Still, we continue to caution that the recovery path will probably be drawn out and could be quite painful.

Full Story

 

 

Busy Data Calendar to Confirm or Refute Continuing Financial Market Optimism...

Trevor Williams, Chief Economist at Lloyds TSB Financial Markets

A sense of cautious optimism prevails in financial markets. And the week ahead is rich in economic data that will provide further clues on the pace of improvement in global economic conditions. Following September’s disappointing US non-farm payrolls and ISM manufacturing data, financial markets are likely to use this week’s releases to judge whether confidence has risen too far, too quickly. The latest monetary policy decision from the Bank of Japan is also due, where we look for the key overnight call rate to remain at 0.1%.

Full Story

 

Other Pre-screened Independent Contributors

J-Chart

J-Chart is an innovative charting and bias-neutral market analysis tool. Based on its proprietary theoretical concept and display of market price action, J-Chart provides a much clearer and unique insight into the market than conventional charting methods. This innovative charting and market analysis tool is designed to visualize market price action that constructs unique price patterns called "Equilibriums". Based on its "non-fixed time frame" concept and "Kinetic Equilibrium" application, J-Chart users are able to forecast markets' future movements with high accuracy.

J-Chart Weekly Newsletter

 

Compiled By: Michael Wright, Daily FX Research

Resources

• free demo account
• forex courses
• open an account
• forex stream
• free webinars