BSE has remained fore-runner in meeting the needs of the market to empower market participants with right information at right time. SENSEX, the market barometer has always retained the Top-of-Mind recall value among the millions of investors globally.Market dynamism and expectations from market participants has always kept us on meeting newer challenges. Here is a widget, known as Market Watch, t
The US dollar has been hammered since late last week, falling to a 24-year low against the Aussie dollar, a 1-month low against the euro and a 2-month low against the Canadian dollar this week. Although US interest rates appear to be on hold for now, the recent rally in the greenback has hit a wall and the currency has reversed course, as rising inflation across the globe cuts off the prospect of
In recent days we have seen oil hit $102 a barrel or 100% higher than what it traded at this time last year, gold hit a record $964 an ounce Wednesday and copper rose to $387 a pound, up close to 30% this year alone. At the same time the US dollar index has hit a record low of 74.30, down almost 11% from the same time last year. One might legitimately ask why oil is twice the price it was last year if the world is gripped by an economic slowdown and why are copper prices shooting through the roof when new home sales in the US are at a 2-decade low? The US economy grew a paltry 0.6% year-on-year in quarter 4 and is probably close to negative growth this quarter, yet US headline inflation is running at 4.3% and yesterday US producer prices recorded their highest year-on-year increase since 1
Futures markets are pricing in an 80% chance of a 50 basis points cut Wednesday, to follow the 75 basis points cut from last Tuesday, meaning if the Fed cedes to futures market expectations tomorrow, the Fed Funds rate will have declined by a massive 225 basis points, or 2.25%, in just 4 months. If this is the outcome, Bernanke and co. will be cheered by stock market investors and the Fed certainly can’t be accused of watching from behind the curve, although many inflation watchers are certain to accuse the Fed of bowing to Wall Street pressure and abandoning longer-run economic sustainability, in favour of short-run economic growth. What are the arguments for against the various options open to the Fed?Why Cut the Fed Funds rate by 50 basis points?a) Markets expect it and were the Fed n
What to expect from the ECBThe ECB’s Monetary Policy Committee delivers its final rate verdict of the year on Thursday next. It is 100% certain rates will be unchanged for the sixth consecutive month, meaning the baseline interest rate for the euro area will remain at 4.0% into 2008. While the rate outcome seems not in doubt, of more significance to markets is the accompanying statement and the precise language used by Jean Claude Trichet, the ECB President, when he presides over the customary press conference, 1 hour and 15 minutes after the official rate announcement. During the whole global credit crisis, which first befell financial markets back in August, the ECB maintained its hawkish bias throughout. This week the MPC finds itself between a rock and a hard place, as recent economic data points to a cooling in the euro economy, credit woes are worsening in financial markets, while euro area inflation hit a 6 year high in November. Dovish comments have begun to emanate from ECB
Will interest rates be cut on December 4?The Bank of Canada meets on December 3rd and 4th next week to deliberate and to deliver the Central Bank’s latest monetary policy decision (Tuesday the 4th). This is arguably the most important policy decision in 18 months as much has changed since the Bank last met in early October. Inflation has slowed, with the Bank’s preferred core rate falling to 1.8% in October, the slowest rate of inflation since June 2006. The headline rate also slowed, to 2.4% from 2.5% in September. Inflation is now lower in Canada than in the US and with the Fed in an easing cycle, the Bank of Canada is expected to follow suit, albeit in a less aggressive manner than the Fed. The key question is whether the Bank of Canada will move to cut rates now or wait until early 2008. Recent economic data may well make the decision somewhat less painful for the Bank and it will be something of a surprise to me if rates are not cut next week. Underlying fundamental data point
The Birmingham Alabama Luxury Home Market has been coming up a lot over the past few weeks based upon statistics from the Birmingham MLS. According to the Birmingham MLS luxury home sales are up. (Let me note for this article, I am classifying luxury properties as those that sell/list for one million or more.)Sold PropertiesJan-Sept 2006Number Sold: 69Average Price: $1,375,566Price Range: $1,000,000-$2,700,000Avg. Days on Market: 108Percent of Asking Price: 95.54%Jan-Sept 2007Number Sold: 85Average Price: $1,463,868Price Range: $1,000,000-$3,495,000Avg. Days on Market: 122Percent of Asking Price:94.66%According to this, 85 million dollar plus homes have sold so far this year. The highest price sell was $3,495,000 and the average million dollar plus home that sold, sold for $1,463,868. Average days on market for the sold luxury homes was 122 days up 14 days from the same time frame in 2006. However, the average sold price is $1,463,868 which is up $88,302 from the same time period last
Is the high-flying loonie going to punish the Canadian Economy?Six months ago I wrote an article warning the loonie (called this because of the bird on Canada’s one-dollar coin) was undervalued, oversold and due for a reversal in fortune. At the time the US dollar was worth 1.1850 against the Canadian dollar, with the euro valued at 1.56 Canadian. The Canadian economy was beginning to pick up following 6 months of lacklustre growth to the end of last year. Oil prices were rallying to over $60 having come off a low of $50 a barrel earlier in the year. Consumption was on the up, exports were growing steadily, employment was rising faster than forecast, business confidence was improving and there were some early signs that inflation was beginning to tick upwards. Against this backdrop of evidence it was a mystery why the currency was rejected, but that soon changed when economic report after report demanded the world take notice. Before we had time to blink the loonie had appreciated to
Is this deliberate policy?The US dollar has spent much of the past 6 months hitting record lows against most of the world’s leading currencies, including the pound, the euro and nearly all of the major commodity currencies: the Australian dollar, the Canadian dollar and the Norwegian Krone. The US currency has fallen 20% against the Canadian dollar (the US constitutes 80% of Canada’s exports) since March, 15% against the Australian dollar since August and 7% against the euro in the past 7 weeks. Although the dollar is the weakest of the major currencies in the world this year, US politicians have grown more vocal about the weak Chinese currency (primarily a fixed rate currency allowed to trade within a narrow band with the US dollar) and have been pushing legislative bills to penalise China for its apparent currency manipulation. Yet, is the US guilty of a similar offence and is it allowing its currency slide into the abyss, deliberately. With the US dollar index at an all-time low
As we speak, the Canadian dollar has hit a low (1.5590) against the euro not seen since May 2005. Although the Canadian economy hit a rough patch in the latter half of 2006, the economy has shown strong signs of recovery this year, with economic fundamentals reflecting a marked improvement thus far in 2007. In the most recent economic outlook report from the OECD for developed nations, Canada was the only economy of the leading nations that was seen to expand in the coming months, with a general slowdown being forecast for the wider group. Commodity prices, important to Canada’s corporate coffers, have rebounded in the past 2 months and Canada’s burgeoning trade surplus and massive energy reserves make it the envy of rest the world. Employment is flourishing and the Canadian construction sector has been booming, unlike in the US. So why is the country’s currency behaving like that of an emerging country, at the wilful mercy of currency speculators?There are a number of factors /
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