Posts Tagged ‘Central Bank’

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. 


Chinese Central Bank to Raise Rates on Friday?

January 20th, 2010 Michael McDonough Comments off

My sources in China have notified me that a reputable Chinese business paper, the 21st Century Business Herald, has begun reporting on a market rumor that indicates the Chinese Central Bank may be planning a 27bp rate hike this Friday. I personally know very little about the paper, and believe this news is highly speculative. Many analysts do not anticipate a move by the Chinese Central Bank until the Fed begins to hike in order to avoid an inflow of speculative capital. However, considering the recent pace of Chinese tightening this rumor can not be completely discounted.  After yesterday’s sell-off it will be very important to pay attention to any developments stemming from this story. After receiving the news I spoke with some money managers on the ground in China, and their first reaction was given what is presently available “it’s hard to comment”.

The Original Article (in Chinese):


Categories: Asia/China Tags: ,