The much-awaited FOMC meeting is here. Discussions appear to revolve around to main questions. What should the Fed do and what will they do? The two are often confused.
Everyone has an opinion about the former. It is like watching a sporting event. We do not let our lack of experience prevent us from being critical of players or coaches and offering unsolicited advice (even if through a TV) on how to win. What should the coach do?
During Pope Francis’ visit to the United States next week, he will insist that the church transcends partisan politics, and I am sure he means this sincerely. However, that will not prevent his visit from having political ramifications.
Seven years ago today, following frenzied weekend meetings, Lehman filed for bankruptcy. It confirmed the end of an era in a way that Bear Stearns demise had only hinted. The world has not been the same since.
Human rights campaigners have levied some serious accusations against the World Bank Group. The accusations assert that the World Bank has repeatedly either targeted or failed to protect individuals that have protested World Bank funded development projects, such as the construction of dams, roads, and other projects.
The US dollar trades narrowly mixed to start what could be a pivotal week. The week has two parts: before and after the FOMC meeting. Before the meeting, we expect broad consolidation, with a modest downside bias in the dollar, as some of the late longs (established after the August 24 frenzied sell-off) shake out by either the loss of momentum or lack of conviction that the Fed will hike this week.
A flood of data comes in the week ahead. The US reports consumer prices, retail sales and industrial output figures. The Eurozone reports industrial production and the final August CPI. Germany releases the ZEW. The UK reports consumer prices, the latest labor market readings and retail sales. Japan reports industrial production and trade figures.
The prosperity that we are enjoying today could largely be attributable to the industrial revolution of the 18th and early 19th centuries. Yet this enhancement of our standard of living has come at a steep price: the creation of the so-called linear economy.
In other words, we have a “take, make, and dispose” economy. We take natural resources, make things and dispose of them in landfills and elsewhere.
What started, as a pompous affair of five nations coming together in support of one another’s infrastructural needs, now appears to be more of a promotional event.
The global capital markets are subdued as the week draws to a close. Asian stocks, while European bourses are heavier. Bonds are firm. The dollar itself is little changed against the major currencies.
The RBNZ cut rates 25 bp to 2.75%. It was already discounted, but what punished the kiwi was the intimation by Wheeler of scope for additional rate cuts. Another cut looks likely by the end of the year. The New Zealand dollar is off by nearly 2%, fully retracing the past two days of gains. Stops thought to lie below $0.6240. There is a large option struck at $0.6300 reportedly expires tomorrow.
