Countries & Regions Archives - Page 353 of 358

August 17, 2011

Aussie dollar recovery is tentative

The Aussie Dollar recovered above the former primary support level at $1.04, testing resistance at $1.06. Breakout would indicate an advance to $1.10. But there are several question-marks over the latest advance. First, the rally has accompanied a similar recovery on the ASX 200 (to test resistance at 4500). If resistance holds, as expected, the AUD is likely to retreat.

Australian Dollar

* Target calculation: 1.04 – ( 1.10 – 1.04 ) = 0.98

Second, the CRB Commodities Index confirmed a primary down-trend with a sharp fall below 335. The primary trend is unlikely to reverse at this stage and another down-swing would drag the Aussie Dollar lower.

CRB Commodities Index

* Target calculation: 330 – ( 350 – 330 ) = 310

August 17, 2011

US debt shrinkage slows

Having fallen by almost $1 trillion since its peak in 2009, the decline in US bank lending is slowing, with the annual rate of change approaching zero. A stable level of debt would reduce deflationary pressure and signal that residential and commercial real estate prices are bottoming.

US Bank Loans Leases and Securitised Loans

Most of the money pumped into the economy over the last year leaked straight back out, with excess bank reserves deposited with the Fed rising by more than $500 billion.

US Bank Assets

August 17, 2011

UK austerity bites

UK bank lending to households jumped slightly in June 2011, but the annual rate of change remains negative at -3%.

UK Household Debt

Commercial loans continue to shrink at an annual rate of 7.5%, signaling a dearth of new investment and job creation by the private sector.

UK Commercial Debt

August 17, 2011

China bank lending slows — but not enough

China’s growth in bank lending has slowed to an annual rate of 15% from its peak of 35% in 2009, but indicates that further tightening is required to bring the inflation hangover under control.

China Total Bank Lending

August 17, 2011

Australian bank lending slows

Annual rate of change in Australian household debt is falling but remains in positive territory for the time being.

Australian Household Debt

Commercial debt, however, has fallen by more than A$100 billion since its peak in 2009, signaling a fall in new capital investment and job creation by the private sector.

Australian Commercial Debt

August 17, 2011

ICI – Long-Term Mutual Fund Flows, August 10, 2011

Total estimated outflows from long-term mutual funds were $16.94 billion for the week ended Wednesday, August 3, the Investment Company Institute reported today.

via ICI – Long-Term Mutual Fund Flows, August 10, 2011.

August 16, 2011

Europe need not wait for Germany – FT.com

Replacing all national sovereign bonds (although not loans) with common eurobonds would create a market worth €5,500bn. It would be backed by governments that together owe less debt, run a lower combined deficit and have greater tax-raising capacity than the US and Japan. It would almost certainly lead to lower yields than the current eurozone average and virtually eliminate the possibility of a bond buyers’ strike.

via Europe need not wait for Germany – FT.com.

Creating a common Eurobond would make economic sense but is politically unachievable because of opposition in Germany. Convincing Germans that it is in their best interests will test Angela Merkel’s leadership abilities to the full.

August 16, 2011

Sensex reveals short-term support

Staggered red candles, rather than free-falling with little or no overlap, indicate the presence of short-term buying support on the Sensex Index. Higher volumes tend to support this. Respect of support at 16500 would indicate another test of resistance at 17500. Failure of support, however, would test 16000*.

India SENSEX Index

* Target calculation: 17500 – ( 19000 – 17500 ) = 16000

August 16, 2011

Michael Barone: The Fall of the Midwest Economic Model – WSJ.com

So what does the president have to offer the Midwest? The idea that the wave of the future is an ever-larger public sector financed by a more or less stagnant private sector looks increasingly absurd. The Midwest’s public sector has, as Margaret Thatcher put it, run on “other people’s money.” Meanwhile, Mr. Obama’s trip to the Midwest has been preceded by Texas Gov. Rick Perry’s foray into Waterloo, Iowa. Mr. Perry points out that his state, with low taxes and light regulation, has been producing nearly half of America’s new jobs.

via Michael Barone: The Fall of the Midwest Economic Model – WSJ.com.

August 15, 2011

Behind its lectures, China is a sinner, too – FT.com

The main point is that China’s debt burden is far higher than it likes to admit, and much of that debt has piled up in the past few years, as a result of Beijing’s response to the global financial crisis.

“Even though headline sovereign debt levels are low in China, so much quasi-sovereign activity happens through the banking system that if you include some of those contingent liabilities, the number can get very big,” says Charlene Chu, head of Fitch’s China Bank Ratings.

“People forget that China undertook its fiscal stimulus package through the banking system rather than by issuing public debt in the way that other countries did.”

via Behind its lectures, China is a sinner, too – FT.com.