Wednesday Whiplash – Coordinated CB Action Traps Bears!
by phil - November 30th, 2011 8:17 am
The new Beige Book is here, the new Beige Book is here!
I'm sorry but I get very excited about this kind of stuff. I love data, especially the kind of data our policy-makers rely on to make their future decisions. Although the BBook is a gathering of anecdotal evidence from the Fed's 12 regions (see map below), the data comes from businessmen that are respected by each Fed Governor so THEY take it seriously and if they take it seriously, you'd better too.
We'll have to wait until 2pm for today's main event but we get early sentiment readings out of New York with the ISM Report and at 9:45 we get the Chicago PMI. We already got a TERRIBLE number on Mortgage Applications (down 11.7%) but we'll call that a holiday thing (hopefully) and we'll see if that's confirmed or denied in the 10am Pending Home Sales Report.
We have Challenger Job Cuts and Productivity Numbers and Oil and OH MY GOD – SCREW THAT – MORE FREE MONEY IS HERE!!!
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.
These Central Banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.