Yellen Speaks while the Yen and Sterling get Testy

The Japanese yen is the only major currency not to be gaining against the US dollar.  Emerging market currencies, save the Chinese yuan, are also advancing against the greenback today.  The yen rose 3.5% against the dollar last week, and rising equities and commodities are weighing on the yen.

The dollar rose to almost JPY108 in Asian trading and is consolidating in the European morning.  The JPY108.30 area is the first retracement objective, which is a little above the five-day moving average (~JPY108.05).

Should Asia be Worried about Trump?

Virtually every Asian academic, business leader, policymaker or taxi driver I have encountered in the last six months has, within minutes, pummelled me for answers to the Trump question.

So Now the ECB is Buying Corporate Bonds

In March, the ECB decided to increase its asset purchases from 60 to 80 bln euros a month and to include corporate bonds.  The corporate bond-buying program begins this week.  We use an FAQ format to discuss the key issues.

What is the ECB doing?  The ECB will buy euro-denominated, investment grade bonds from companies incorporated within the Eurozone.

What is the duration of the corporate bonds that the ECB will buy?  The ECB will purchase bonds that mature in six months to 30 years.

June or July Now Looks Like July

Through the first part of the year, the swinging pendulum of expectations for the trajectory of Fed policy has been a major driver in the foreign exchange market.  This is true even though the ECB and BOJ continue to ease monetary policy aggressively.

The Australian and New Zealand dollars appear to be influenced more by the shifting view of Fed policy than the expectations in some quarter that the RBA and RBNZ could cut interest rates as early as this week. 

Is the Dollar Correcting for the May Advance?

The US dollar reversed higher on May 3 and trended higher.  It peaked on May 30, but it was not clear until the poor US jobs report sent the greenback reeling on June 3.  The fact that May 3-May 30 move is over is the most important technical consideration for the dollar's outlook.

It is interesting to recall that the dollar had bottomed a fortnight before the FOMC minutes and Fed comments had encouraged the market to re-price a summer hike. The dollar now has peaked prior to investors pushing out the rate hike once again.

Gender-biased Disaster Response

The ASEAN Agreement on Disaster Management and Emergency Response (AADMER) came into being in December 2009. It has played a tremendous role in enhancing regional and national capacities for disaster response in the region.

The recent ‘ASEAN Vision 2025 on Disaster Management’ document provides thoughtful insights on how AADMER can move towards a more people-centred, sustainable and better-networked approach. However, these suggestions do not directly address the disproportionate impact disasters have on women.

Is the Slowing Asian Economy Secular in Nature?

A gloomy outlook is enveloping the world’s economies. There are concerns too that countries are failing to sufficiently focus on long term policy responses to reverse the decline in global growth. Some argue that the global growth slowdown may be permanent, highlighting the danger of a period of chronically low growth, or what economists term “secular stagnation.”

Illicit Financial Flows Outpace Global Growth

No inclusive growth is conceivable without success in Nigeria’s anti-corruption drive. Today, that struggle is increasingly global.  In mid-May, the world’s first anti-corruption summit took place in London. During the event, the chair, UK Prime Minister David Cameron was caught on open mike disclosing to Queen Elisabeth II that attendants included some “fantastically corrupt” countries, including Afghanistan and Nigeria.