US Taper Fundamentals Update as at 19 December 2013 by Lorenzo Beriozza The facts behind yesterday FOMC’s decision of starting the tapering are: The Federal Open Market Committee decided to reduce the scale of its monthly asset purchases by $10 billion starting in January 2014. As a result, the Committee will add to its holdings of [...]
US Budget Deal Analysis Fundamentals Update as at 18 December 2013 by Lorenzo Beriozza The plan effectively substitutes later deficit reduction for current increases in spending by relaxing the sequester caps for two years. In fact, about $45 Billion of the easing in budgetary authority happens in FY2014, with another $19 Billion in FY2015. This [...]
Japan Balance of Payment Fundamentals Update as at 17 December 2013 by Lorenzo Beriozza Japan posted a seasonally adjusted current account deficit of ¥59.3 billion for October, marking a second straight month in the red (-¥125.2 billion for September) for the first time in records dating back to 1996 and only the fourth monthly deficit [...]
US Budget Deal December 2013 Fundamentals Update as at 13 December 2013 by Lorenzo Beriozza Yesterday, Paul D. Ryan (Republican) and Patty Murray (Democrat), chairs of the House and Senate Budget Committees, respectively, agreed on a compromise on discretionary fiscal spending for the next two years. Under the deal, the discretionary spending caps for the current [...]
France Snapshot December 2013 Fundamentals Update as at 12 December 2013 by Lorenzo Beriozza After some improvement earlier this year, French business surveys are again bucking the (timid) euro area improvement trend. In the past it was easier to register more optimistic views than the consensus on France –and the data have supported this, in the sense [...]
US Snapshot December 2013 Fundamentals Update as at 11 December 2013 by Lorenzo Beriozza US government budget negotiations will likely lead the market risks next week regarding the prospects of a deal just yet, and the real deadline is not until at least mid-January by which point a new funding agreement must be in place before [...]
FOMC Preview December 2013 Fundamentals Update as at 10 December 2013 by Lorenzo Beriozza The US, it is alleged, has fallen into “secular stagnation.” Not one but two academic heavyweights—Larry Summers and Paul Krugman —argue that to achieve full employment, the US needs not just low interest rates, but negative interest rates. If correct, investors [...]
FOMC Preview December 2013 Fundamentals Update as at 9 December 2013 by Lorenzo Beriozza With improved labor market data as a backdrop, market participants have pulled forward their expectations of an initial Fed taper. Given the equanimity with which the bond and equity markets absorbed the strong November employment report on Friday morning, it is [...]
EZ Deflation Fundamentals Update as at 5 December 2013 by Lorenzo Beriozza Relief that the EZ (Euro Zone) has finally exited recession has come with strong gains in equity markets across the region. After six consecutive quarters of declining output, investors are right to see some light on the horizon. They are also rightly impressed [...]
ECB Preview December 2013 Fundamentals Update as at 4 December 2013 by Lorenzo Beriozza ECB set to ease again, but not already in December Inflation will remain top of the agenda at this month’s ECB meeting and looking ahead it should lead to more stimulus from the ECB, but the meeting this Thursday 5 December [...]
