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Bloomberg Briefs’ Global Central Bank Monitor

March 24th, 2011 Michael McDonough Comments off

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November 11th, 2010 Michael McDonough Comments off

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The QE Trade Road Map From the Bloomberg Brief: Economics

November 3rd, 2010 Michael McDonough Comments off

When the Federal Reserve launched its unprecedented program of quantitative easing in early 2009, it was difficult to predict how various asset classes would react. Now, as the Fed considers a second round of asset purchases, the first program has left a blueprint of sorts behind that could be useful in predicting how markets might respond. The table here shows, as measured by R^2, how strongly the fluctuations in a variety of assets are correlated with the level of securities held by the Fed during the first six months of 2009. The table also displays the performance of these assets during the first half of 2009, as well as in the period since Fed Chairman Benjamin Bernanke’s Jackson Hole speech, where he laid out the case for additional quantitative easing.

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**This is an excerpt from the Brief published on 10/29/10**

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Morgan Stanley Expects Strong Tightening from Canada

March 8th, 2010 Michael McDonough Comments off

Sophia Drossos, the co-head of global FX strategy at Morgan Stanley, believes Canada will soon begin tightening rates based on the Central Bank’s inflationary concerns. Sophia said, “We’re looking for them to deliver 50 basis points rate hikes in the second quarter, and the market is slowly coming around to our point of view because the fundamentals in the data have been so strong.” She went on to say, “We think the rate-hike cycle is going to start in June and continue through the end of the year, and we’re looking for 125 basis points rate hikes, and the market’s only pricing in about 60.”

Canadian Dollar:

Source: Bloomberg

*The CAD has been one of the G10’s best performing currencies in 2010, only behind the Japanese Yen.  The worst performer has been the British Pound. 

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