Archive for March, 2009
Czech Republic: CNB keeps interest rates on hold
The Czech central bank (CNB) left interest rates unchanged at its monetary setting meeting today, leaving the key policy rate at 1.75%. The decision was widely expected and therefore should not come as a surprise to the market with the Czech koruna and yields moving only moderately on the back of the announcement. Despite the sharp drop in Czech economic activity supporting further loosening of monetary policy, the Czech central bank has made it very clear through several verbal interventions
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Poland: NBP delivers moderate 25bp rate cut
The Polish central bank (NBP) today cut its key policy rate by 25 basis points to 4%. The decision to cut by 25bp was in line with our and consensus expectations, even though this week's coordinated verbal intervention of the Polish, Hungarian, Czech and Romanian central banks to defend dramatically weakening CEE currencies has raised the question as to whether the first central bank holding the monetary policy meeting after verbal intervention - the Polish central bank - would fulfil its
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FOMC: No news from Bernanke
Overview: The first session of the semi-annual monetary policy report was delivered by the Fed Chairman to the Senate this afternoon. Generally, there was not much new in the testimony. The Chairman confirmed that the Fed is on an ultra-easing bias and stands ready to do whatever it takes to make the economy recover. The report, which was accompanied by very bad consumer confidence numbers, was taken relatively lightly by the market. US bond yields declined temporarily, but recovered along
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Hungary: Weak HUF keeps interest rates on hold
The Hungarian central bank (MNB) today decided to keep the key policy rate unchanged at 9.50%. The decision was completely in line with our and consensus expectations, and clearly reflects the recent significant depreciation of the Hungarian currency (HUF). Fundamentally, however, we believe the MNB would like to cut interest rates further to stimulate economic activity, but the recent dramatic weakening of the HUF and large external imbalances limit any further aggressive monetary easing
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Hungary: MNB keeps rates on hold, but stands ready to hike
The Hungarian central bank (MNB) today decided to keep its key policy rate unchanged at 9.50% - in line with consensus and our expectation. Hence, the MNB Monetary Council did not think that the resignation of Prime Minister Gyurcsany this weekend should trigger a rate hike. The Hungarian central bank is undoubtedly in a very challenging situation. The economy is contracting significantly and GDP is likely to drop by more than 5% this year, which will reduce inflationary pressures. On the
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Turkey: TCMB cuts leading rates by 100bp
Today, 19 March the Turkish central bank (TCMB) cut its key policy rate (the borrowing rate) by 100bp to 10.50% and its less important lending rate by 100bp to 13.00%. The bank's decision was in line with the consensus expectation. TCMB has cut its borrowing by an accumulative 625bp since November 2008. In a statement, TCMB said that the economic slowdown will be prolonged and added that inflation will trend downward. It said that any additional rate cuts would be measured in scale. We share
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FOMC: Going all the way
Overview: The Federal Open Market Committee (FOMC) took yet another aggressive step at its meeting tonight by committing to purchase up to USD300bn in longer-term Treasury securities over the next six months, concentrated in the 2- to 10-year sector of the nominal Treasury curve. In addition, the Fed will expand its MBS purchase programme by USD750bn to a total of USD1,250bn and increase its purchase of agency debt by up to USD100bn. The Fed also scaled up its interest rate rhetoric stating
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Fed kept its target rate unaltered and intensifies quantitative easing
The economic outlook worsened Fed significantly increased the size of its balance sheet Similar measures are likely in the near future The FOMC decided to maintain its target interest rate at 0 to 0.25%. During the intermeeting period, economic conditions remained weak as “Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending.” In addition, financial instability has prompted firms to scale back investment, while exports of
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Fed kept its target rate unaltered and intensifies quantitative easing
The economic outlook worsened Fed significantly increased the size of its balance sheet Similar measures are likely in the near future The FOMC decided to maintain its target interest rate at 0 to 0.25%. During the intermeeting period, economic conditions remained weak as “Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending.” In addition, financial instability has prompted firms to scale back investment, while exports of
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Change is Great… At Least For The Other Guy
Change is all around us and most individuals are OK with that as long as it does not impact them. Bottom line is that we can not escape change, and those who want to be better at what they do learn how to handle change. Traders will deal with change every day. We cannot control changes in the market, the economy or other areas that impact the value of our trade, but we can learn to adapt to the change to make it work for us instead of against us. We can also make our own changes to what we are
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