The EU-wide bank stress test results released on July 15 offered little reprieve for financial markets as concerns over the eurozone sovereign debt crisis continue to dominate. At the heart of the stress test scenario is the ‘adverse scenario’, in which the euro-area economy contracts 0.5% in 2011 and equity markets fall 15%, while banks… [Read more]
Although equities sold off in the wake of US Fed Chairman Ben Bernanke’s comments to the International Monetary Conference in Atlanta, my colleagues and I see little evidence of any change to the Fed’s overall outlook. Bernanke reiterated the FOMC’s expectations that higher headline inflation would prove a transient phenomenon; that the labour market was… [Read more]
US macroeconomic data in the past fortnight have been decidedly weak. The Philly Fed index came in much weaker than expected, while the Conference Board’s leading indicators index dropped for the first time in 10 months in April. Housing starts and initial jobless claims reports have also been poor, following a weak Q1 2011 real… [Read more]
Flash estimates for Q1 2011 growth in the eurozone’s core states released on Friday reaffirm our above-consensus outlook for the bloc, and should help underpin euro strength versus the dollar in the months ahead. France posted its best quarterly growth performance since 2006, while Germany’s growth was the best since reunification (at 5.2% y-o-y), both… [Read more]
The dichotomy in global growth stories became clearer this week. China and Singapore published above-consensus Q1 2011 growth figures (real GDP growth rose by 9.7% y-o-y and 23.5% q-o-q annualised, respectively), while BMI revised down its expectation for the same quarter in the US down from 3.5% to 2.3% with downside risks, and for 2011… [Read more]
Helped by a 25bps hike in eurozone interest rates to 1.25% on Thursday, the euro has broken through US$1.4300/EUR to trade at a 14-month high of US$1.4441/EUR at one stage on April 8, in line with BMI’s bullish view of the currency. In fact, my colleagues and I envisage further short-term gains to our upside… [Read more]
In line with the view that Business Monitor Online promoted on March 3, euribor futures have traded much lower on the back of European Central Bank (ECB) President Jean-Claude Trichet’s hawkish comments on monetary policy. Most notably, he said that a rate hike in April was possible. Indeed, the June 2012 contract broke key support… [Read more]
