New Overnight Developments Abroad - Daily Update

Yesterday’s Rebound in Sovereign Debt Yields Trimmed

August 20, 2019

Ten-year sovereign debt yields slipped Tuesday by five basis points in Germany and the United States, three bps in Great Britain and a basis point in Japan. Yields had dropped very sharply earlier in August but staged a rebound yesterday. Without government stimulus, investors fear a continuing global growth slowdown and possibly even a recession. […] Read Article

Foreign Exchange Insights and Next Week

Next Week’s Menu of Data and Events

August 16, 2019

Central Banks: Monetary policies to be reviewed in Sri Lanka and Indonesia. Minutes from last policy meetings to be published by the Fed and Reserve Bank of Australia. The annual Kansas City Fed-Sponsored central bank symposium in Jackson Hole, WY runs from August 22 through 24 with a theme of “challenges for monetary policy.” Scheduled […] Read Article

Central Bank Watch

Mexico Joins Group of Central Banks to Cut Central Bank Interest Rate

August 16, 2019

President Trump’s hostile handling of America’s southern neighbor since mid-2015 had created a vicious cycle of  peso depreciation and accelerating domestic inflation in Canada, forcing Mexican monetary authorities to repeatedly jack up their overnight interbank interest rate target from 3.0% prior to the first move in mid-December 2015 to 8.25% after the last move in […] Read Article

Deeper Analysis

U.S. Manufacturing Advantage Grew Versus Euro Area During July

August 1, 2019

The ISM-compiled U.S. manufacturing PMI in July slipped another half point of 51.2, which is a month short of a 3-year low. New business improved slightly, but the sub-indices fell for production, employment and prices. The slower improvement in U.S. manufacturing was outmatched by a faster deterioration in Euroland manufacturing. The IHS-compiled PMI for the […] Read Article

New Overnight Developments Abroad - Daily Update

Better Market Tone as a Few Restraints on China Loosened

August 19, 2019

Share prices on Monday advanced 2.2% in Hong Kong, 2.1% in China, 1.0% in Australia and 0.7% in Japan and Taiwan. Stock  markets in several European centers (London, Paris and Frankfurt, for instance) have risen at least 1.0%, and the DOW opened over 300 points higher. Ten-year sovereign debt yields are at least five basis […] More

New Overnight Developments Abroad - Daily Update

More Weak Data around the Globe

August 16, 2019

New Zealand’s manufacturing purchasing managers index fell below the neutral threshold of “50” for the first time since September 2012, with a reading of 48.2 in July after 51.1 in June. U.S. housing starts dropped 4.0% in July to a 5-month low of 1,191 million units. This was only 0.6% greater than in July 2018. […] More

New Overnight Developments Abroad - Daily Update

U.S.-Sino Trade Relations Remains at Center Stage

August 15, 2019

The trade war between China and the United States rumbles on. While scheduled U.S. tariff hikes have been delayed to December, Beijing officials are not inclined to give the Trump Administration what it seeks and instead are preparing to retaliate in kind. A senior officials at the Reserve Bank of Australia expressed reservations about the […] More

New Overnight Developments Abroad - Daily Update

Yield Curve Inversion Amplifies Recession Fears and Flight to Safe Assets

August 14, 2019

The 2-year Treasury note yield edged marginally above the 10-year yield for the first time in 14-1/2 years. This and a similar yield curve inversion in the U.K. happened as investors selectively fixated on weak data while ignoring some better-than-expected statistics, causing share prices to drop sharply in Europe and the United States. Losses amount […] More

New Overnight Developments Abroad - Daily Update

Peso Panic and Some Deescalation of the U.S.-Sino Trade dispute

August 13, 2019

Sunday’s primary election in Argentina served notice that populism is making a big comeback there and has generated a stampede out of the peso (down nearly 22%) and local stocks, whose share prices tumbled nearly 50% and by the second largest day-to-day slump in seven decades. Investors fear a return to protectionism and other state […] More

Larry's Blog

Baseball Notes

August 12, 2019

The 2019 regular season is roughly three-quarters done, which makes this a good time to elicit a few observations about what differentiates this season from others. Among the major sports, baseball teams by far play the most games (162) in a regular season. Long before I found a calling in economics and currency market watching, […] More

New Overnight Developments Abroad - Daily Update

Dollar Mixed While U.S. Stocks and Treasury Yield Decline

August 12, 2019

World financial markets began this week in a risk-averse state of mind over the trade dispute between China and the United States, softer global growth and inflation, and the geopolitical risk posed by street protests in Hong Kong. Presidents Trump and Xi seem unprepared to find common ground on a trade agreement this year or […] More

Foreign Exchange Insights and Next Week

Next Week: August 10 – 17, 2019

August 9, 2019

Central Banks: Monetary policy reviews in Norway and Mexico. With summer vacation scene fully upon us, very few central bank officials are scheduled to speak, Kent and Debelle of the Reserve Bank of Australia being an exception. Holidays: Japan observes Mountain Day on Monday, and Thursday is Assumption Day in several European countries. Scheduled U.S. […] More

Central Bank Watch

Central Reserve Bank of Peru

August 9, 2019

The latest central bank to cut its benchmark interest rate is the Central Reserve Bank of Peru, whose reference rate was lowered late yesterday to 2.5% from 2.75%. The statement announcing the decision cites the widely experience havoc being spread by changes in U.S. trade policies by the Trump Administration: “Global growth risks persist and […] More

New Overnight Developments Abroad - Daily Update

Sterling Weakens on Data

August 9, 2019

The dollar edged down 0.2% against the yen and kiwi, 0.3% versus the peso, and 0.1% relative to the euro, Swiss franc and Canadian dollar on this 45th anniversary of the resignation of former President Nixon. But today’s weakest major currency has been sterling, down 0.6% against the dollar in response to  news that British […] More

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