Archive for October, 2008
Euroland: ECB to ease faster and more
We have changed our interest rate projection for the ECB. We are now looking for it to lower the key lending rate by 50 bp in November 2008 and by a further 25 bp in each of January, March and June 2009. Previously we expected the ECB to lower rates by 25 bp in December 2008 and by a further 25 bp in both February and April 2009, and stated the risk of a further 25 bp rate cut by June. The precise timing of the rate changes is difficult to determine, and in these turbulent times timing is
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Turkey: TCMB leaves rate unchanged
The Turkish central bank (TCMB) has decided to leave its borrowing rate unchanged at 16.75%, in line with most observers' expectations. TCMB also announced that it has cut its lending rate by 100bp to 19.25%, to limit volatility in short term rates. The decision follows a day in which the lira fell sharply against the dollar, as equity markets plummeted and bond yields rose to a two-year high amid declining appetite for risk in Emerging Markets. The lira extended its losses after the rate
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Hungary: Emergency hike of 300bp
The Hungarian central bank (MNB) has just hiked its key policy rate by 300bp to 11.50%. The hike is an emergency measure. While the forint has strengthened by more than 1½% on the back of the hike, this is not that much taking into account the size of the hike. The hike has to be seen in the light of the serious pressure on the forint in recent weeks.
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Decide to Be a Learner
The world is changing rapidly every day. All financial markets move from a smooth pathway to a very volatile environment in the blink of an eye. For each of us to continue to reach and exceed our goals and objectives, we cannot sit still. If we think that we are educated and expect to sit back and just use that knowledge to achieve what we desire, then we are going to receive a big surprise. Only when we decide to continue learning will we stay on a pathway of continued success. Listen to the
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Hungary: Unchanged rates - focus remains on credit crisis
In line with expectations, the Hungarian central bank (MNB) today kept its key policy rate unchanged at 8.50%. This should come as no surprise to anybody. Given the recent pressure on the forint, it is impossible for the MNB to ease monetary policy at the moment - despite the fact that the recent turmoil is likely to lead to a further significant slowdown in growth and reduced inflationary pressures.
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Change Is Always A Challenge
As traders it is so easy to criticize our trading strategy when results do not meet our expectations. The last thing we want to do is acknowledge that we might be making mistakes. However, rarely does a proven trading strategy continuously deliver poor results without the discovery of a trader making changes in the steps due to unproven gut feelings, revenge tactics, fear, greed and so many other emotions that arise when we try to outsmart the market. For all of us to enhance our skills and
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Being In Control Requires A Decision
Our thoughts, attitudes, words, actions, habits and character are what determine our destiny. As a trader, each of us needs to decide that we will be in control of each and every session. We must understand and accept that the way we respond to great successes as well as disappointing losses has a huge impact on how we approach our next trading session. Trading is a skill that we add knowledge and new objectives on a daily basis. If we stand still, the market will become more difficult to
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You Will Never Get Wet Unless You Jump In
We all can probably remember a time early in our life when we were standing on the edge of a pool or a boat dock and being encouraged to jump in. We waited and waited and sometimes never jumped in or maybe we jumped in immediately. Those same feelings are still with us today when we trade. The world around us has a way of instilling indecisiveness in executing trades or exiting trades. If we have developed a proven process of risk management, money management and a strategy that has been
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Norway: Forget about inflation
As widely expected, Norges Bank today cut its policy rate by 50bp to 5.25%. In the press release Norges Bank put all its focus on the financial crisis, while the current high rate of inflation received almost no attention. With regards to the financial crisis, Norges Bank said that, "The most robust approach may therefore now be to implement measures to reduce the uncertainty and stave off particularly adverse outcomes for the economy. This implies a more active monetary policy than normal,
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FOMC Policy Action October 8
• FOMC lowered its target interest rate by 50bp to 1.5% • The move is part of a global joint effort to alleviate financial stress around the world • Fed movement was widely expected by market participants • Fed recent communication and today’s action confirm that downside risks to growth have increased dramatically • Further rate cuts cannot be ruled out if conditions worsen Press Release FOMC Policy Action October 8, 2008 The Federal Open Market Committee has decided to lower its target for
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