Bank of Canada cuts Rate 75bp to 1.5%
10/12/08 06:48
BoC cut its policy rate by 0.75% to 1.5% (0.5%
expected), the lowest level in 50 years.
The new US 4-week Treasury bills were sold at a high rate of 0% and rate of 3-month Treasury bill briefly traded in the negative territory.
The US government and Congress were negotiating terms for emergency loans that could give taxpayers an equity stake in the US automakers.
US equities retreated after two days of big gains, on the profit warnings from FedEx and other companies. Dow fell 242.85 points (2.72%) to 8691.33 and S&P500 gave up 21.03 points or 2.31% at 888.67. Transportation stock led the pull-back, with Fedex plunged 14.5% after saying its 2009 profit would fall shy of estimates.
Markets were also rattled by an extraordinary sale of US Treasury bills which saw an unprecedented 0% rate. This highlighted the dysfunctionality in the money market as banks are unwilling to absorb new deposits from other banks and agencies and would rather pile it into equivalent maturity treasury.
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The new US 4-week Treasury bills were sold at a high rate of 0% and rate of 3-month Treasury bill briefly traded in the negative territory.
The US government and Congress were negotiating terms for emergency loans that could give taxpayers an equity stake in the US automakers.
US equities retreated after two days of big gains, on the profit warnings from FedEx and other companies. Dow fell 242.85 points (2.72%) to 8691.33 and S&P500 gave up 21.03 points or 2.31% at 888.67. Transportation stock led the pull-back, with Fedex plunged 14.5% after saying its 2009 profit would fall shy of estimates.
Markets were also rattled by an extraordinary sale of US Treasury bills which saw an unprecedented 0% rate. This highlighted the dysfunctionality in the money market as banks are unwilling to absorb new deposits from other banks and agencies and would rather pile it into equivalent maturity treasury.
Read More...
Expect Further Rate Cuts Across the Board - It's worse than "they" are leading us to believe.
29/10/08 21:28
While central banks are expected to cut rates, there
is little to suggest that cuts will be able to
moderate the pace of global economic deterioration.
That said, the Fed cut rates 50bp as expected today.
The language in the accompanying statement was as
expected, emphasizing downside risks to growth and
citing moderating inflation. But importantly, there
was nothing to discourage thoughts that the Fed could
cut again, as they did not view 1% as a "lower
bound". There are forcasts for further cuts down to
0.5% by the January 2009 meeting. The Fed also
announced additional swap lines of $120bn, this time
with four large emerging markets, bringing the number
of swap lines set up in the last year to fourteen.
Macro data continued to be weak, despite durable
goods orders for September rising 0.8% (cons -1.1%).
The August reading was revised down and the last two
months together show a weak trend. The upcoming GDP
release should show that the US economy contracted in
Q3.
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