Bonds/Interest Rates

The Dow exploded to the upside mid-afternoon when S&P announced bond insurers Ambac and MBIA could both keep their AAA ratings.

The Dow bounced hard on the death on Friday as news broke that Ambac was about to be rescued.

Last night’s Philadelphia economic activity index was the worst reading since just before the 2001 recession.

The Dow closed up 90 points last night in a session dominated by the release of the January Fed minutes.

Some economists believe that for the RBA to tame inflation, standard variable mortgage rates may hit 10%.

Even allowing for the impact of recent bad weather DBS Group notes inflationary pressures are becoming the biggest threat for Chinese policy makers, so no change to tighter monetary policy is expected.

The Westpac-MI leading index shows the Australian economy is slowing while remaining above trend in December.

Wall Street gave up early gains last night as oil moved to close over US$100/bbl, bringing inflation more firmly into focus.

Revelations from the minutes of the last RBA meeting suggest another interest rate in March is all but in the bag.

The Dow fell 175 points after three consecutive up-days following comments from Ben Bernanke.