Nov 2, 2012 | Asia, Fiscal Policy, Global Economy, Japan, Monetary Policy
The Japanese economy continues to weaken and a recession is now the main consensus. The country’s trade balance, which was long in surplus, is now moving deeper and deeper into deficit and the third quarter numbers almost certainly will show contraction, and these are...
Jul 17, 2012 | European Economy, Monetary Policy
The SNB lately reiterated its stance to maintain a EURCHF floor of 1.20. In the process, the SNB has amassed billions of foreign currency-denominated assets, about half of which is EUR, and certainly some of dubious quality (some of the recent moves tighter in French...
Jun 11, 2012 | Monetary Policy, US Economy
The US CPI is currently just above target at 2.3%, and long-term market expectations of inflation measured by the US inflation swap curve remains mid-range. This is in stark contrast to all-time lows in nominal treasury yields which appear to be pricing in almost the...
Apr 19, 2012 | European Economy, Featured, Monetary Policy
In our view, the Spanish banking system is in need of wholesale recapitalisation to deal with the sizeable losses in the country’s property market. This will likely include a bad bank provision. Before that happens, the ECB’s open market operations will mainly buy...
Jan 3, 2012 | European Economy, Monetary Policy
Since early September the ECB’s balance sheet has expanded by 589 billion euros (about 750 billion USD) and the Fed USD swap lines are currently sitting at around 100 billion USD. The second LTRO to be conducted towards the end of February is then very likely to...
