Despite the ending of the US Federal Reserve’s second round of quantitative easing (‘QE2’), BMI believes that there will be few ill effects, and that monetary policy will remain very loose for several quarters to come. We do not see Fed rate hikes until late 2012, and the risks are that hikes are put off… [Read more]
Friday morning’s news that the People’s Bank of China (PBOC) has decided to raise the yuan reserve requirement ratio for banks by 50bps to 18.5% comes as little surprise to BMI. It is in line with our Asia team’s expectations that the ratio would be increased further in order to cool runaway credit growth. And… [Read more]
Data from the second quarter has reinforced our long-held core outlook for a downturn in US growth in H210 and 2011. On this week’s Business Monitor Podcast, BMI’s Head of Country Risk and Financial Markets Justin Patrie and Global Economic Strategist Tim Cooper, revisit their views on the shape of the US recovery and the… [Read more]
Last Wednesday, Watchdog pointed out that the move through US$1.3000/EUR would set up euro gains towards US$1.3800/EUR. At US$1.3400/EUR, I wrote on www.businessmonitor.com that US$1.4900/EUR was a realistic possibility, as the dollar would come under renewed pressure due to Fed easing, in both conventional monetary policy and quantitative terms. In fact the dollar has depreciated… [Read more]
Using the word ‘unprecedented’ too often risks diluting its significance. But with the US government’s rescue of government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, we are once again in unprecedented territory, following on from the Federal Reserve’s aggressive intra-meeting rate cuts, the opening of new Fed lending facilities, and the last-ditch rescue of… [Read more]
