Norway dumps Irish and Portuguese bonds, Switzerland increases Sterling reserves

The Swiss National Bank reported its reserve figures yesterday and the increase in its sterling holdings are notable and may help explain the its relative strength, despite data a soft real sector reports, culminating in the news last week that, defying expectations, the UK economy contracted in Q1, the second consecutive quarter that the British economy shrank. Separately, Norway’s sovereign wealth fund, the Government Pension Fund Global, indicated it has sold off its Irish and Portuguese bond holdings, pared its Spanish and Italian holdings and increased its exposure to Mexico, Brazil and Indian bonds

Sweden and Norway are reporting strong economic numbers

Sweden reported stronger business and manufacturing confidence numbers earlier this week, but the Feb retail sales report was a more significant catalyst. There are four new developments from Norway today. Individually and collectively, they are positive for the NOK. The Norwegian krone and Swedish krona are the strongest major currencies today, appreciating about 0.85% and 0.6% respectively. While the fundamental justification of the more modest gains in the other major foreign currencies may be more elusive, in the Scandi’s case, fundamental developments are supportive

Norway Surprises and Ongoing Funding Woes

By cutting 50 bp in one swoop, the Norges Bank hopes to get ahead of the curve. This is part insurance against addition headwinds, but also responds to the recent data indicating an economic slowdown

After the FOMC, Norway and the UK

If the Fed does not do anything new, Bernanke and Co. risk disappointing the market and the fallout that may follow. QE3 at this juncture does not seem a likely and few observers disagree. After the FOMC meeting is out of the way, the policy focus will shift the Norway and the

Norges Bank Raises Rates

While many of our readers may not be particularly interested in Norway, two of our Casey Report investment picks are in the country – hence the quick update on the Norges Bank’s (the Norwegian Central Bank) rate decision

Norway’s Oil Fund: Realizing Full Potential in a Fiat Currency World

The financial climate has changed radically from when Norway’s Oil Fund was established in 1990. Norway has built up its savings since then by selling enormous quantities of oil and gas, and employing many thousands of workers. By coincidence, an even larger sum of $600 billion recently has been created overnight – electronically on computer keyboards, by the U.S. Federal Reserve Board as part of Chairman Ben Bernanke’s Quantitative Easing policy (QE2). This money has been provided to spur bank liquidity, in hope that they can earn their way out of the losses they suffer from their bad mortgage loans and other gambles.

The aim of these banks is the same as that of Norway’s Oil Fund: to make money. As the financial press has noticed, nearly the entire $600 billion has been sent abroad – to the BRIC countries and raw materials exporters in strong balance-of-payments positions, whose economies are not as “loaned up” as those of the United States and Europe, where Norway invests most of its money. So while Norway is putting its money into these countries, their financial managers are jumping ship – sending electronic dollars and euros to the economies that use their own sovereign wealth funds in the opposite way from what Norway is doing.

EUR/NOK

The Norwegian Krone looks interesting with oil prices high and the Norwegian domestic economy doing well. Andy Lees of UBS writes: Whilst I like the Norwegian currency, benefitting from its oil and gas, its oil fund and the fact that 98.8% of its electricity comes from non fossil fuels, if we are playing QE then

Norway Buying European Peripheral Bonds

Norway’s government pension funds is the second largest sovereign wealth funds in the world with around $450 bln under management. Abu Dhabi is thought to have the largest sovereign wealth fund. The finance minister indicated that it has bought peripheral European bonds (Spain, Greece, Italy and Portugal. Ireland was note cited). Although many observers are

BBH CurrencyView: US Dollar Softer, Market Takes a Pause

Highlights The US dollar is somewhat softer today as the market takes a pause to consider recent developments.  News that Fitch reaffirmed its AAA rating for Spain, despite S&P’s move yesterday, and heightened speculation that European officials are working on a larger multi-year fund for Greece, and a relatively smooth Italian bond auction, are helping

The Swedish banking crisis response or the bailout hustle?

I referenced Matt Taibbi’s latest work at Rolling Stone “Wall Street’s Bailout Hustle” recently when talking about a movie on Ponzi schemes and fraud that aired on 60 Minutes. I liked the piece and recommend you read it – fully aware of the awaiting hyperbole Taibbi uses to hype his case. The interesting bit is

Will the U.S. allow China to buy more Gulf of Mexico oil assets?

This is a crucial question because Devon Energy, the Oklahoma-based independent oil and natural gas producer has just decided to put billion of dollars in Deep sea Gulf of Mexico assets on the market. Canada’s National Post reported: Devon Energy Corp. hopes to raise up to US$7.5-billion from the sale of its Gulf of Mexico

Norway makes three

The Norwegian central bank has hiked rates 25 basis points, making it the third central bank and first European central bank to do so since the global recovery process started. The Financial Times says: Norway’s central bank increased its key interest rate by a quarter point to 1.5 per cent on Wednesday – Europe’s first