(As written for My Paper on 28 August 2012. Click here to enlarge)

On 22nd August, Federal Reserve Chairman Ben Bernanke sent a letter to California Republican Darrell Issa, who is the Chairman of the House Oversight and Government Reform Committee. In that letter, Bernanke said that “there is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery.”

This is basically a repeat of his statement from the Federal Open Market Committee (FOMC) meeting on 1st August when he mentioned that the Fed will “provide additional accommodation as needed.” Come 31st August, Bernanke will speak at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming. It will be interesting to see if Bernanke will follow through on his views and actually announce QE3 then.

The US Treasury is scheduled to sell USD99 billion of notes over three days starting today. So far, the price of US 10-year Treasuries have advanced over the last 5 days. The yields have dropped from 1.8 percent last week to 1.67 percent yesterday. This tells us that traders are betting on the fact that the Fed would be buying bonds. The yield touched a record low of 1.38 percent on 25th July and has averaged 3.73 percent for the past decade.

Read more…

(As written for My Paper on 14 August 2012. Click here to enlarge)

An on-going European debt crisis and better-than-expected economic data from the US has combined to give the US dollar a boost.

Over the last few days, the greenback looks to be holding its head up high amongst some of the other major currencies. In fact, the dollar has risen 7.1 percent in the past year, according to the Bloomberg Correlation-Weighted Indexes, which tracks the performance of ten major currencies.

This far outshines the Yen – also considered a safe haven – which rose only 2.9 percent.

A separate assessment of the Bloomberg Correlation-Weighted Indexes also threw up an interesting observation: between the 7.1 percent gain of the greenback and the 2.9 percent gain of the Yen, stood the South Pacific currencies of the Aussie and the Kiwi. The Aussie is up 3.5 percent this year while the Kiwi is up 4.6 percent.

Read more…

(As written for My Paper on 7 August 2012. Click here to enlarge)

Depending on which data you look at, employment in the US either gained, or dropped, the most in five months.

Last Friday, reports showed that US employers added 163,000 jobs in July, after a revised 64,000 figure in June.

The numbers, which were the first triple digit print in three months, were helped by a surge for workers in the automobile and healthcare industries.

The figures were a lot higher than the median estimate of 89 economists surveyed by Bloomberg, who called for a rise of 100,000.

Read more…