Archive for March, 2006
Iceland raises key interest rate as vulnerable currencies are hit
Iceland’s central bank was forced to raise its key interest rate sharply yesterday to avert a currency crisis sparked by shifts in foreign exchange movements and rising global interest rates. It raised the rate by 75 basis points to 11.5 per cent to head off a crisis of confidence in the krona that has affected [...]
March 31, 2006
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Bond yields touch multi year highs
Government bond yields around the globe touched multi year highs on Wednesday, amid fears of further rate rises in both the US and eurozone in the wake of Tuesday’s latest rise by the US Federal Reserve. Two-year US Treasury yields hit a fresh five-year peak of almost 4.83 per cent while 10-year yields reached 4.82 [...]
March 30, 2006
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Fed signals further moves as loans rates rises to 4.75%
The big news yesterday, and what we had been waiting for, the US Federal Reserve raised rates by 25bp as expected but more significantly signalled that further hikes were on the cards.More importantly, the accompanying statement hinted at more to come, with the FOMC stating that the US economy had “rebounded strongly” in the current [...]
March 29, 2006
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Loans rates hold steady following UK Budget report
Forward loans rates held steady yesterday after UK Chancellor of Exchequer Gordon Brown maintained this year’s economic growth estimate in his annual budget statement, which contained little surprise for the markets. Stephen Nickell remained the lone voice on the Bank of England’s Monetary Policy Committee calling for a rate cut, as the rate-setting body voted [...]
March 23, 2006
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Bad news for Gordon Brown ahead of the Budget Report
UK public finances deteriorated in February following January’s record surplus it was announced this week. Chancellor of the Exchequer Gordon Brown received unwelcome news ahead of tomorrow’s budget report as worse-than-expected public finances figures for February look set to dampen hopes that he may be able to achieve his forecasts for the current fiscal year, [...]
March 22, 2006
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Interest rate speculation continues on both sides of the Atlantic
US equities rallied strongly yesterday as the Federal Reserve’s “Beige book” survey helped relieve any fears about the economy. With many predicting US rates to rise beyond 5% this year the release of the survey was taken as evidence that the risk of further tightening might have been overdone. The Beige book – a round [...]
March 16, 2006
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Bank of Japan (BoJ) starts to return back to normal
The Bank of Japan (BoJ) at it’s two day meeting this week signalled the nearing end of a fifteen year policy of zero interst rates. One could almost hear the sighs of relief from the Bank of Japan yesterday when it announced the end of its unorthodox policy of “quantitative easing”. Normality comforts central bankers. [...]
March 10, 2006
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Movement in UK’s interest rates unlikely until Bank’s next inflation forecast
By the end of the month, the UK may well have lower interest rates than the US for the first time since January 2001. That is the confident expectation of analysts and investors in money markets. All of the City economists recently polled by Reuters expect the Bank of England to keep interest rates unchanged [...]
March 9, 2006
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Dollar moves higher as expectations on the Fed grow
The latest hawkish comments from the U.S. Federal Reserve helped push the dollar back to the black in Europe yesterday. This rise in U.S. rate prospects coincides with a decline in expectations over rate increases in both Japan and the euro zone. St. Louis Fed President William Poole triggered the bullish dollar sentiment by warning [...]
March 8, 2006
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US Treasury yields at 21 month peak
US Treasury yields on Monday hit their highest level since the Federal Reserve began raising interest rates in 2004. The move, which pushed the yield curve inversion to its narrowest in weeks, triggered speculation that the unusual state might be about to end. Longer dated yields are usually higher than short dated ones since investors [...]
March 7, 2006
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