Tuesday, December 16, 2014

Russia hikes rates sharply to defend the collapsing RUB

     Russia hikes rates sharply to defend the collapsing RUB
    Move will depress the domestic economy but may not stem capital flight
     Oil resumes its decline – technical say it’s headed still lower
     EM currencies react largely as one might expect to lower oil prices
    One major exception:  TRY hits record low on Turkish political risk
     Gold, silver decline despite increased turmoil & uncertainty
    Trading more like commodities than investment vehicles?
    Lack of safe-haven flows into gold suggest it’s losing some attraction
     RBA discussed why market is pricing in chance of rate cut
    May be the precursor to more considered discussion of rate cut = AUD-negative
     China PMI falls further than expected into contractionary territory
     Today:
    Eurozone: PMIs for Germany, France, Eurozone expected to have risen; ZEW survey forecast to have risen = EUR-positive
    Sweden:  Riksbank may hint at (or take) extraordinary measures. SEK-negative
    UK:  CPI expected to slow; bank stress test results coming out

    US: Housing starts & permits; preliminary Markit PMI expected to rise

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