Trade Agreement: Australia and Japan Can, but the U.S. and Japan Can’t

After an extended engagement of seven years, Japan and Australia consummated their relationship by signing trade pact.  It is a milestone in the sense that it is Japan’s first trade agreement with a significant agricultural producer. The big prize, however, is not this, it is the Trans-Pacific Partnership–the multilateral trade agreement including a dozen countries.  […]

Nine Event Risks in the Week Ahead

The investment climate has proven extremely difficult for investors to navigate.  Fed tapering and better world growth was to lead to higher interest rates.  Yet interest rates for the developed world have fallen sharply in recent weeks.    Aggressive quantitative easing by the Bank of Japan was widely understood to be yen negative, yet the yen […]

Back to the Future: Euro, Sterling Bid, Dollar-Bloc Heavy

There has been a dominant theme in the foreign exchange market that had seemed to waver in recent days, but has returned in force today.  That theme is about the divergent performance of the dollar, which makes it difficult to discuss the greenback in general.  Essentially, that theme is for the euro and sterling to […]

What Next, Australia?

Australia is no longer immune to the stagnation in the West. Despite a resilient housing market, Australia’s economy is slowing. With a worsening labor market, consumption is eroding, along with business confidence. In the past two years, the benchmark interest rate has been almost halved to 2.5 percent. Still, Australia’s real GDP growth is likely […]

Stop the Press: IMF Concludes the A$ is 10% Overvalued

News that the IMF has concluded that the Australian dollar is about 10% overvalued and that is accommodative monetary policy was seized upon as an excuse to extend the Aussie’s losses to new lows for the day, near $0.9365.  However, there is really no news content there and bid were seen ahead of yesterday’s low near […]

The End of Australia’s Boom Economy

In the post-war era, there is the strong relationship between economic and electoral success. Despite having steered the nation through the 2007/8 crisis, Australia’s left of centre Labour Party was defeated at the 7 September election 2013, primarily for other political reasons. The new conservative Liberal-National Party government faces a country with altered prospects. As […]

Asia Impulses Dominate Activity

The US dollar is narrowly mixed against the major European currencies, but the dollar-bloc is stronger and the yen continues to sport a soft profile, though within yesterday’s ranges. Events in Asia remain key to the global capital markets. China shocked the market by reporting a $880 mln trade deficit instead of a $15.4 bln […]

Australia Cancels Giant $1.5 Billion Solar Dawn Project

Australia’s giant, 250 megawatt, $1.5 billion Solar Dawn solar thermal power plant, planned for development in south-west Queensland, has been cancelled. The Solar Dawn Consortium, led by Areva Solar, has said that it will remain committed to the large-scale concentrated solar power industry, but that this particular project will not go ahead. Back in July […]

RBA Delivers, Is the Riksbank Next?

The Reserve Bank of Australia delivered a 25 bp rate cut earlier today. While the ECB, BOE and BOJ meet later this week, expectations are low for additional action. Sweden’s Riksbank meets on October 25 and could be the next central bank to cut rates. The Riksbank cut the repo rate 25 bp in early […]

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