Daily FNArena News - FYI

The current global liquidity crisis has attracted a lot of headlines but many investors may not fully understand the situation, so Danske Bank has outlined the central banks’ role in such a situation.

The Dow spent all day in solid positive territory on low volume, only to slip away at the death.

Global central banks had little choice but to inject liquidity into a rapidly freezing global banking system last week. But could this prove more harmful than beneficial in the long run?

It’s CPI week in the US and Europe. Inflationary numbers will provide an interesting dilemma. The RBA airs its thoughts today in a quiet week for Aussie data.

Wall Street gyrated wildly on Friday, ending virtually unchanged as the Fed and ECB stepped up their liquidity injections.

Central banks in the US, Japan, Australia and particularly Europe have moved to stop the credit crunch started by the subprime crunch from turning into a full-blown liquidity crisis.

Last night the ECB made a startling move by injecting E95bn into the banking system as BNP Paribas froze three hedge funds through lack of liquidity. The Dow fell 387 points.

With 40% of total exports coming from soft commodities a positive outlook for meat, forestry and dairy prices Macquarie suggests New Zealand’s GDP growth will continue to be solid.

The Dow rose 153 points last night, but it wasn’t all smooth sailing.

Weekly musings from your editor. This week he shares some thoughts about a meeting with two experts out of the FNArena database of readers.