On Thursday, the Fed raised the discount rate (the rate at which it provides emergency funding to commercial banks) from 0.5% to 0.75%, taking the spread over the main fed funds rate, currently set at 0% to 0.25%, to a more normal level. It also reduced the maximum maturity of loans back to overnight, closing the 30-day facility introduced in August 2007.
Investors take discount rate hike in their stride - Read More

At a meeting in Brussels, Eurozone finance ministers told Greece it must introduce more spending cuts and revenue-raising measures next month if it appeared unable to meet its pledge to cut its deficit by four percentage points to 8.7% of gross domestic product this year. However, the Greek finance minister, George Papaconstantinou, argued that more explicit support from the European Union was required.
Eurozone ministers raise the pressure on Greece - Read More

Also in light of the positive 4Q’09 GDP report, the Bank of Japan decided not to expand its lending and asset purchase programmes. However, the Japanese central bank maintained the benchmark interest rate at 0.1%, with deflation still posing a large threat to the economic recovery.
Better than expected 4Q’09 GDP growth number - Read More

The MSCI AC Asia Pacific ex-Japan Index was static in local currency terms and rose 0.3% in USD terms as many markets were closed at least temporarily due to the Chinese New Year celebrations.
Markets tepid due to Chinese New Year closures - Read More

In Latin America, Brazil created a record number of jobs in January, adding 181,419 to the workforce. A central bank survey predicted that inflation this year will outpace the government’s target, thereby heightening the prospects of an interest rate increase in March or April. The BOVESPA ended the week 2.6% higher.
Rising inflation expectations fuel Brazil interest rate speculation - Read More

For all the recent concern over deficits, debt and defaults, investors were reminded of another ‘D’– deflation – that will warrant their attention. The -0.1% US core CPI reading for January was the first negative print since 1982 and highlights another one of the hangover effects of the recession. One month, of course, does not a trend make, but even on a 3-month basis US core inflation has flatlined.
January’s negative US core CPI print raises deflation concerns - Read More