Bank Research Consensus Weekly 10.08.12

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Bank_Research_Consensus_Weekly_10.08.12_body_BankResearch.png, Bank Research Consensus Weekly 10.08.12

Investor flows into CHF slow further in September

Arne Lohmann Rasmussen, Chief Analyst, Danske Bank

Safe-haven flows into Switzerland slowed significantly in September as the foreign currency jumped to a record CHF429.3bn up CHF8.5bn over the month. Hence, the Swiss central bank continued to intervene in the market in September even if we adjust for currency changes. However, the inflow is much more benign versus May and June time when the currency reserve jumped CHF68bn and CHF60bn, respectively. All in all, it seems that the removal of some of the tail risks from the euro zone has removed much of the need for investors to buy safe-haven currencies such as the CHF.

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QE3 Should Hold Rates Down

John E. Silvia, Chief Economist, Wells Fargo

September’s employment data sent yields modestly higher this morning. The employment report showed the unemployment rate falling a surprising 0.3 percentage points to 7.8 percent, with a huge 873,000 increase in household employment accounting for much of the improvement. The drop in the unemployment rate comes after the release of the Fed minutes where there was a great deal of discussion about whether to set formal targets for the unemployment rate or labor market, more generally in terms of deciding when it would be appropriate for the Fed to end its unusually accommodative monetary policy.

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U.S. – Labor Market Is Improving, But How Much?

James Marple, Senior Economist, TD Bank Financial Group

Capping off a week in which the two main contenders for President engaged in their first televised debate focused mainly on the economy, the biggest monthly economic report of them all – the employment report – was released this Friday. With only one more employment report to go before the election on November 6th, the numbers will surely be scrutinized and made into talking points by both campaigns over the next several weeks.

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Compiled by David Song, Currency Analyst

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