Daily FNArena News - FYI

Inflation rose to a 16-year high in July in Europe, and unemployment increased for the first time in three years.

Weekly musings by your editor. Why do we so often forget to pay attention to the wider context?

According to GaveKal the Aussie dollar’s strength has been due to its attraction in the carry trade but if rates come down as the economy slows the currency is likely to tumble.

A dour IMF global update added to the general gloom surrounding financials overnight, while Merrill Lynch takes some drastic measures.

As the US government passes its Fannie & Freddie rescue plan into law, the UK Treasury is preparing its own means of saving mortgages.

As the US second quarter earnings season nears its completion, the focus now swings to Australia and the first trickle of full/half year results from Downunder.

In the view of Standard Chartered the US Dollar remains in a long-term downtrend and will fall further, though not before a sharp rally next year as central banks elsewhere look to stimulate growth.

According to TD Securities the evidence is mounting the commodities cycle is poised for a turn lower, which would reduce inflationary pressures but put commodity currencies under pressure.

Weekly musings by your editor. Australia is facing a “hidden recession” and investors better not think that because it is hidden, it’s not there.

ANZ Bank notes outside the US equities have fallen in July while volatility is rising, suggesting continued caution on behalf of investors.