January 27, 2015
Juno was downgraded to sub-blizzard status. N.Y.C. is likely to get just a foot of snow, and the stock exchange opened as scheduled but with a thud, as the Dow dropped over 1.0%. In Europe, equities have declined 5% in Greece, 1.4% in Germany, 1.2% in France, 0.9% in Spain, 0.8% in Britain and 0.6% […] Read Article
January 23, 2015
Central Bank Policy Meetings: Federal Reserve (but not press conference), Bank of Mexico, Bank of Russia, Central Bank of Sri Lanka, South African Reserve Bank, Bank Negara Malaysia, Reserve Bank of New Zealand, Magyar Nemzeti Bank, Bank of Israel, and the Bank of the Republic of Colombia. Minutes will be released from the Bank of […] Read Article
January 27, 2015
A two-year-long campaign of central bank interest rate reductions, which cumulatively cut the two-week deposit rate by 490 basis points to 2.1%, ended last July when a final 20-basis point reduction was engineered. The baseline scenario since then has been to leave the rate at the current level for all of 2015, but today’s latest […] Read Article
January 15, 2015
Real economic activity expanded 1.5% in 2014 following minuscule gains of 0.4% in 2012 and 0.1% in 2013. Growth last year was led by a 1.1% rise in personal consumption, which accounted for 40% of the overall growth rate. Business spending on machinery, equipment and construction rose about 3.5% and accounted for 0.5 percentage points […] Read Article
January 27, 2015
The latest policy review at the Central Bank of Sri Lanka retained an 8% lending rate, a 6.5% deposit rate, and a 6% reserve requirement ratio. The interest rates arrived at current levels after reductions in each of 25 bps in December 2012, 50 bps in May 2013 and 50 bps in October 2013, plus […] More
January 26, 2015
Israel’s central bank interest rate was left at the record low level of 0.25%, where such has been since a 25-basis point cut announced late last August. An accompanying statement notes that both inflation and expected inflation continue to lie well below the 1-3% target range, that economic growth improved last quarter, and that trade-weighted […] More
January 26, 2015
Markets reacted with concern to a resounding victory of the Leftist anti-austerity Syriza Party in Greek parliamentary elections over the weekend. The 10-year Greek sovereign debt yield jumped 33 basis points, and Greek share prices have fallen 3.5% after initially losing 5.6%. One member of the ECB Governing Council reiterated that there can be no […] More
January 23, 2015
Saudi Arabian King Abdullah has died. Former Crown Prince Salman is the new king. The dollar has depreciated 0.8% against the yen while rising 0.9% versus the Aussie dollar, 0.5% relative to the euro, 0.3% vis-a-vis the yuan, 0.2% against the kiwi and 0.1% versus the loonie and Swiss franc. Sterling is 0.1% firmer against […] More
January 22, 2015
The ECB today announced a decision to begin buying in March sovereign and private-sector bonds at a pace of EUR 60 billion per month. Officials took this controversial action, not favored by all, in response to lower-than-expected inflation, weaker-than-desired money and credit growth following earlier initiatives including long-term loans of cheap credit to banks, an […] More
January 22, 2015
Brazil has several sizable economic imbalances. Inflation of 6.4% in the year to December is hovering around the top of the 2.5-6.5% target range in spite of the dive in global oil prices. GDP contracted marginally between the third quarters of 2013 and 3Q14. The current account and fiscal deficits are excessive, constituting around 4% […] More
January 22, 2015
Yesterday it was the Bank of Canada. Today, the ECB Governing Council announced plans to begin buying EMU member sovereign debt bonds and private sector bonds in March. EUR 60 billion of assets will be bought each month in this quantitative policy initiative and continue through September of 2016. In any case, the program will […] More
January 21, 2015
Canada’s overnight money rate target was cut by 25 basis points to 0.75%. Officials acknowledged some undesirable yet unavoidable surprise to markets in this decision, which is a response to an unambiguously negative impact on Canada of the recent plunge in oil prices. Today’s rate change was the first since the third of three 25-basis […] More
January 21, 2015
The BOJ Board was not expected to change is quantitative monetary stimulus settings (QQE), and it didn’t surprise in that regard. Less than three months ago, planned annual JGB purchases were increased from 50 trillion yen, which had been the plan since April 2013, to JPY 80 trillion, and the targeted average maturity of JGB […] More
January 21, 2015
In response to disinflationary implications of the plunge in oil prices, the Bank of Canada cut its overnight money rate target to 0.75% from 1.0%. Oil price changes also pose downside risks to growth, which is projected to fall to around 1.5% in the first half of this year, and to financial stability. The prior […] More
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