Bank Research Consensus Weekly 05-25-09

Published May 26th, 2009 - 03:06 GMT

In making its decision to put the U.K. on the negative watch list, S&P noted that “even assuming additional fiscal tightening, the net general government debt burden could approach 100% of GDP and remain near that level in the medium term.” So S&P’s concerns revolve both around the high level of debt – which would be a doubling over four years – as well as the ability to reduce it over time. Canada and Japan both saw their debt ratings downgraded in the mid-1990s when their gross debt levels rose above 110%, as well, so the risks of a downgrade rise as debt levels get to the 100% of GDP level.

Steve Chan, Economist, TD Bank Financial Group



Weekly Bank Research Center 05-25-09



 

Is it Really a ‘Job-Rich' Recession?

Stephen Roach, Head Economist, Morgan Stanley

In the early 1990s and early 2000s in the US, we saw what were called ‘jobless recoveries'. The labour market then was unusually slow to pick up in the aftermath of the recession. In this global recession, the labour market in Singapore seems to be showing a contrary trend. To be sure, the labour market is a lagging indicator. Employment growth in Singapore lags GDP growth by around two quarters. On the way up, corporates are usually slow to add to headcount, preferring to increase overtime hours for existing workers until the macro recovery firms. On the way down, human resource management simply cannot be as precise as just-in-time inventory management. The demand shock tends to be absorbed first by the profit cushion before the wage cost containment exercise starts.

 

Full Story

 


 

Mixed Bag from China

Niels-Henrik Bjørn Sørensen, Senior Analyst, Danske Bank

The main message from Chinese data at the moment is that domestic demand is becoming increasingly robust, aided by fiscal and monetary policy easing, while exports are recovering only quite slowly from their low at the beginning of the year. Somewhat surprisingly exports fell by 2.0% m/m in April, but they are still well above the February low. If we ignore short-term m/m fluctuations, the overall trend seems to be that exports are in any case no longer falling, and export data from the likes of South Korea and Taiwan would suggest that exports are currently on their way up again after the collapse.

 

Full Story

 


Every Claim You Stake, I’ll Be Watching You

Steve Chan, Economist, TD Bank Financial Group

In making its decision to put the U.K. on the negative watch list, S&P noted that “even assuming additional fiscal tightening, the net general government debt burden could approach 100% of GDP and remain near that level in the medium term.” So S&P’s concerns revolve both around the high level of debt – which would be a doubling over four years – as well as the ability to reduce it over time. Canada and Japan both saw their debt ratings downgraded in the mid-1990s when their gross debt levels rose above 110%, as well, so the risks of a downgrade rise as debt levels get to the 100% of GDP level.

 

Full Story

 


Bond Yields Rise on Credit Ratings Fears

Trevor Williams, Chief Economist at Lloyds TSB Financial Markets

Speculation that the Fed may boost its asset purchase programme to reinvigorate economic growth and rising concerns about the credit standing of the US saw the dollar come under strong selling pressure this week. The dollar index, which measures its performance against its key trading counterparts, fell to its lowest level so far in 2009, slipping below 80 on Friday, from a peak of 89.11 in March. Further signs that strains in credit markets may be easing, with 3-month US $ Libor recording its biggest weekly decline this year, may also have dulled the safe haven allure of US assets and the $ this week.

 

Full Story

 


Other Pre-screened Independent Contributors

J-Chart

J-Chart is an innovative charting and bias-neutral market analysis tool. Based on its proprietary theoretical concept and display of market price action, J-Chart provides a much clearer and unique insight into the market than conventional charting methods. This innovative charting and market analysis tool is designed to visualize market price action that constructs unique price patterns called "Equilibriums". Based on its "non-fixed time frame" concept and "Kinetic Equilibrium" application, J-Chart users are able to forecast markets' future movements with high accuracy.

 

J-Chart Weekly Newsletter

 

 

Compiled by: David Song, Currency Analyst

You may also like