World economy talk

[uls]

bigger mover EURJPY

[uls]

the market expected the ECB to cut its main interest rate but the ECB didnt

people ask why the euro remained stronger than the dollar despite the crisis

here's why... it's the interest rate

ECB = 0.75%

Fed = 0.25%

btw... BoJ = 0.10%

[uls]

bad US jobs number... which is good... coz it brings QE3 closer... which is bad for the dollar... which is good for...

[Monseratto]

Good for our foreign debt and imports, bad for the OFWs and exports...

MANILA - The peso hit a new high of 41.54 vis-à-vis the US dollar for this year as investors dumped the greenback on the back of the positive sentiment towards the Euro zone over the weekend.

At the Philippine Dealing System, the peso opened 11 centavos stronger at 41.57 against the dollar from 41.68 on Friday. This erased the previous high recorded on July 19 when the local currency reached 41.57 against the greenback.

The peso is trading between 41.54 and 41.610 as of 11:07 a.m. on Monday, with total volume reaching $425 million.

According to Metrobank Research, the positive sentiment over the recent European Central Bank meeting triggered some risk trading overnight, prompting global markets to dump the US dollar across the board. Asia, including the Philippines, followed suit.

Last Friday, there was aggressive selling of the dollar as US payrolls in August rose less than expected at 96,000 from an estimate of 130,000, or lower than the revised 141,000 additional jobs in July.

Unemployment numbers also did not help as the rate unexpectedly dropped to 8.1 percent with more Americans leaving the labor force.

All these factors are negative to the dollar, a currency trader said.

Meanwhile, China's growth trajectory is a mixed bag, with industrial output coming below expectations at 8.9 percent against the expected 9.1 percent. Retail sales in August were within the expected 13.2 percent. The producer price index dropped faster than expected and consumer price index accelerated.

With these factors at play, Metrobank sees the peso trading within 41.5-41.80 for the rest of Monday.

[Ry_Tower]

^ That is why economics is so challenging and frustrating at the same time. Ano kaya equilibrium dyan?

[uls]

ECB gamechanger last week

they removed the risk of euro breakup

[Monseratto]

Everyone buying into commodities, hoping for QE3...

[uls]

FOMC meeting Sept 12 & 13

my prediction: they'll extend zero rates to 2015 and buy mortgage-backed securities

if i'm wrong... then i'm wrong

[uls]

Everyone buying into commodities, hoping for QE3...

tonight wheat, corn, soybeans are up. crude oil is flat. gold is down a bit

[uls]

US 30 yr bond yield



the Fed is trying to create inflation

the 30 yr is most sensitive to inflation expectations

[uls]

i don't follow individual stocks much but this got my attention

[Monseratto]

i don't follow individual stocks much but this got my attention

Even the asian market didn't save it from falling profits...

The luxury goods firm, famous for its red, black and camel check, warned adjusted pre-tax profits for the year to March 31 will be around the lower end of market expectations.

Burberry, which was founded in 1856, spent much of the year bucking the gloomy trend in the wider retail sector due to its exposure to robust emerging markets, especially China.

[uls]

so naturally wanna find out how other luxury goods companies are doing

[Monseratto]

When social media was used to spread a cheap US-made movie insulting Mohammed... type ni OB.

US official dies in Libya consulate attack in Benghazi

An American has been killed and at least one other wounded after militiamen stormed the US consulate in the Libyan city of Benghazi, officials say.

It is believed the protest was held over a US-produced film that is said to be insulting to the Prophet Muhammad.

The building was set on fire after armed men raided the compound with grenades.

Protests have also been held at the US embassy in the Egyptian capital, Cairo.

In the attack in Benghazi, unidentified armed men stormed the grounds, shooting at buildings and throwing handmade bombs into the compound.

Security forces returned fire but Libyan officials say they were overwhelmed.

"One American official was killed and another injured in the hand. The other staff members were evacuated and are safe and sound," Libya's deputy interior minister Wanis al-Sharif told AFP.

The identity of the US official killed is not yet known. The consular worker was reported to have been shot.

Social media calls

Reports say a militia known as the Ansar al-Sharia brigade was involved in the attack, but the group has denied the claim, the BBC's Rana Jawad in Tripoli reports.

Our correspondent says many people are still armed following the conflict that overthrew Muammar Gaddafi last year.

The US said it condemned the attack "in the strongest terms" and was working with Libyan security forces to secure the compound, a statement by US state department spokeswoman Victoria Nuland said.

The film that sparked the demonstration is said to have been produced by a 52-year-old US citizen from California named Sam Bacile, and promoted by an expatriate Egyptian Copt.

The two men are described as having anti-Islamic views.

A trailer of the low-budget movie has appeared on YouTube and translated in Arabic.

There were calls on social media networks for protests against US interests in the capital, Tripoli, but no disturbances have been confirmed, our correspondent says.

The rally followed a demonstration in Cairo, in which protesters breached the US embassy and tore down the United States flag, which was flying at half mast to mark the 9/11 attacks, and replaced it with an Islamist banner.

'Abuse freedom of speech'

In Cairo, the US flag was torn down and set alight by the demonstrators
Thousands of protesters had gathered outside the US embassy in the Egyptian capital.

Egyptian protesters condemned what they said was the humiliation of the Prophet of Islam under the pretext of freedom of speech.

"Both Muslims and Christians are participating in this protest against this offence to Islam," said one protester, according to the Associated Press.

The US embassy earlier issued a statement condemning "the continuing efforts by misguided individuals to hurt the religious feelings of Muslims - as we condemn efforts to offend believers of all religions".

The statement added: "We firmly reject the actions by those who abuse the universal right of free speech to hurt the religious beliefs of others."

The protests have now ended, the state department said. There were no reports of injuries.

[uls]

eur/usd: ECB took away breakup risk

copper: China stimulus

S&P500: QE

SPY/EAFE spread: US equities outperforming rest of the world



US 30 yr bonds: inflation expectations

silver: QE

natural gas: US power generation shifting to natural gas away from coal

corn and soybeans: drought

[uls]

FOMC meeting Sept 12 & 13

my prediction: they'll extend zero rates to 2015 and buy mortgage-backed securities

if i'm wrong... then i'm wrong

and i'm not wrong

QE!

FRB: Press Release--Federal Reserve issues FOMC statement--September 13, 2012

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

it's open-ended QE

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

zero rates extended to 2015

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.

[uls]

reactions:

[uls]

--

this QE is different

the Fed used to set a finite time and amount

this QE has no finite time and amount

[Monseratto]

Stocks ready to spring into action!!!

[Monseratto]

Euro goes ballistic...