dimelab dimelab: shrinking the gap between talk and action.

higher yields Topic in The Credit Debacle Catalog

finding higher yielding alternatives elsewhere (1).

Sun 2010-10-10 11:56 EDT

The Federal Reserve's Relevance Test - Project Syndicate

...as investors look outside the US for higher yield, the flood of money out of the dollar has bid up exchange rates in emerging markets around the world. Emerging markets know this, and are upset -- Brazil has vehemently expressed its concerns -- not only about the increased value of their currency, but that the influx of money risks fueling asset bubbles or triggering inflation. The normal response of emerging-market central banks to bubbles or inflation would be to raise interest rates -- thereby increasing their currencies' value still more. US policy is thus delivering a double whammy on competitive devaluation -- weakening the dollar and forcing competitors to strengthen their currencies...

Federal Reserve's Relevance Test; Project Syndicate.

TraderFeed Sat 2009-10-10 13:48 EDT

Quick Look at TIPS and Beyond

U.S. Treasury Inflation-Protected Securities (TIP; above) are making multi-month highs, amidst the weak dollar and strong gold. I've noticed a tick up in inflation talk among traders as well. With unemployment--not inflation--making the headlines, the Fed hardly has the political cover to begin serious talk of rate increases. With the Reserve Bank of Australia hiking rates, however, there are concerns that we are just a bit closer to the long-awaited exit from monetary ease. Meanwhile, higher Aussie rates only fuel the carry trade that has traders selling U.S. dollars and finding higher yielding alternatives elsewhere.

quick look; tip; TraderFeed.