New Overnight Developments Abroad - Daily Update

Aussie Dollar Lifted by Higher-than-Forecast CPI

July 23, 2014

Australian consumer prices climbed 0.5% on quarter and to a nine-quarter high of 3.0% on year, which coincides with the 2-3% target ceiling.  The trimmed mean measure of core CPI inflation rose to 2.9% from 2.6% in the first quarter and final quarter of 2013.  There seems little chance of a further monetary policy easing, […] Read Article

Foreign Exchange Insights and Next Week

Diminishing Volatility in the Dollar

July 16, 2014

Currencies are sharing in the phenomenon of scant volatility seen this year in many financial markets.  2014 is now 54% completed.  The most influential currency pair, EUR/USD, has fluctuated between a high of 1.3993 and a low of 1.3475, a high-low band of just 3.8%.  Dollar/yen’s trading band of 105.49 to 100.73 so far this […] Read Article

Central Bank Watch

Magyar Nemzeti Bank Winds Up Interest Rate Reduction Cycle

July 22, 2014

Hungary’s central bank declared an end to a 2-year easlng cycle after cutting the key rate by more than expected.  A greater-than-forecast reduction of 20 basis points in the bank interest rate to 2.1% put an end to a streak of cuts that included 12 reductions of 25 basis points, 6 of 20 bps, 2 […] Read Article

Deeper Analysis

U.S. and Canadian Labor Market Performances Unusually Divergent

July 11, 2014

U.S. non-farm payroll jobs rose 272K per month in the second quarter, their fastest pace of increase since March-May 2010, which was inflated by temporary census workers.  Jobs have risen at least 200K in each of the past five months.  In June, they climbed by 288K.  Canada, in contrast, experienced a 9.4K drop in employment […] Read Article

New Overnight Developments Abroad - Daily Update

Less Risk Aversion

July 22, 2014

Now that Ukraine rebels are handing over the bodies of Flight 17 victims, investors are less fearful about an escalating cold war between Russia and Western powers. Share prices climbed 1.7% in Hong Kong and India, 1.2% in China, 0.8% in Japan, 0.6% in Taiwan, 0.5% in South Korea and 0.1% in New Zealand, Australia […] More

New Overnight Developments Abroad - Daily Update

Light Day of Data Leaves Market Focus on Geopolitical Risk

July 21, 2014

There’s continuing momentum to impose harsher economic sanctions on Russia over the downing of Malaysian Airlines Flight 17 in Ukraine. Israel’s ground invasion of Gaza intensified over the weekend. The dollar is unchanged against the euro, yuan and sterling.  It has dipped 0.1% against the yen, Swissie and kiwi but risen by 0.5% versus the […] More

Larry's Blog

Blast from the Past with Lessons for the Present and Future

July 20, 2014

I’ve accumulated way too much paper stuff in my four decades as a currency market watcher and, out of necessity, find myself culling files on a lot of weekends.  This is generally tedious work, but every once in a while I find something I wrote that represents a career milestone as I did today.  It’s […] More

Uncategorized

Next Week

July 18, 2014

Central banks in New Zealand, Hungary, Russia and Colombia have scheduled interest rate policy meetings next week, and minutes from this month’s Bank of England meeting get published.  Reserve Bank of Australia Governor Stevens speaks publicly.  Japan will be closed on Monday for Marine Day.  A G20 taskforce on employment meets in Brisbane, Australia Tuesday-Thursday. […] More

New Overnight Developments Abroad - Daily Update

Geopolitical Tensions Overhang Market

July 18, 2014

Markets are on edge following the downing of Malaysian Airlines Flight 17 in Ukraine by a surface to air missile, the invasion of Gaza by Israeli ground troops, and augmented trade sanctions against Russia by the EU and United States.  If anything is going to break the low volatility environment in the marketplace, this toxic […] More

Central Bank Watch

South African Reserve Bank Tightens

July 17, 2014

As in Turkey, whose central bank cut interest rates earlier today, South Africa faces the dilemma of both weak growth and excessive inflation.  In South Africa’s case, however, the decision was to tighten slightly.  The repo rate, which was increased by 50 basis points six months ago, was this time raised 25 basis points to […] More

Central Bank Watch

Turkish Monetary Policy Eased Again

July 17, 2014

Following cuts of 50 basis points in May and 75 bps in June, the Monetary Policy Committee at the Central Bank of the Republic of Turkey authorized a 50-basis point cut of its one-week repo rate.  The overnight borrowing rate, which hadn’t been changed at those two earlier meetings, was this time sliced to 7.5% […] More

Central Bank Watch

Central Bank of Brazil Keeps 11% Selic Interest Rate

July 17, 2014

The 184th meeting of Copom, Brazil’s monetary policy committee, voted unanimously to leave its Selic interest rate at 11.0% and released a replica of the prior May 28th meeting statement that also decided unanimously to keep the rate steady.  These terse, 92-word communications convey very scant information particularly with regard to any future decisions.  All […] More

New Overnight Developments Abroad - Daily Update

Geopolitical Risk Weighs on Share Prices

July 17, 2014

The U.S. and Europe imposed further economic sanctions against Russia in protest of its meddling into Ukraine affairs.  Russia led European stocks and U.S. futures lower.  Fighting between Israel and Hamas and the ISIS insurgency in Iraq are causing additional geopolitical worry.  Investors remain confused about Fed forward guidance. Share prices are down 1.0% in […] More

Central Bank Watch

Bank of Canada Retains 1.0% Money Rate Target & Releases New Forecasts

July 16, 2014

Canada’s overnight interest rate target has been at 1.0% since a 25-basis point hike in September 2010 and is likely to stay at that level for quite a while longer.  In its released statement after this year’s fifth of eight policy meetings, officials called their accommodative stance “appropriate” and declared continuing neutrality “with respect to […] More

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