Daily FNArena News - FYI

According to Macquarie central banks are likely to lift interest rates modestly to control inflation but such a move would likely further pressure equity markets.

As the US government steps in to save its two sponsored mortgage lenders, one may wonder just exactly what Fannie Mae and Freddie Mac are and why they are so important.

While the US Federal Reserve is becoming increasingly concerned about the inflation outlook the Commonwealth Bank suggests the US Housing market needs to stabilise before a rate hike is considered.

US thrift IndyMac collapsed on Friday as the market focused on Freddie and Fannie. It was the second biggest bank collapse in US history.

Credit insurance group Atradius has surveyed businesses globally and come away with the conclusion the global credit crisis still has further to run.

Weekly musings by your editor. Let’s suppose high oil prices are here to say. Does anyone still see any benefits in portfolio diversification?

The previously bullish picture for the Aussie dollar is becoming more clouded with recent weakness in commodity prices, ANZ suggesting any correction would likely drag the Aussie dollar down as well.

Danske Bank sees the threat of inflation as the biggest driver of forex markets in coming months as only a few central banks are suitably positioned to fight the threat with higher rates.

As the “will they won’t they” debate on Australian interest rates twists and turns, this week sees the latest employment data.

State Street’s graphic interpretation of institutional investor sentiment suggests we are likely to see a further deterioration in risk appetite first, before a recovery will follow.