New Overnight Developments Abroad - Daily Update

Slow But Constructively Solid Start to Week of Christmas 2014

December 22, 2014

Last week’s post-FOMC rally in share prices remained intact in Asian and European trading.  Stocks rose 1.9% in Australia, 1.3% in Hong Kong, 1.2% in India, 1.6% in Singapore, and 1.1% in Taiwan.  Lesser gains were achieved in South Korea of 0.7%, China of 0.3%, and Japan of 0.1%, but equities in Europe so far […] Read Article

Foreign Exchange Insights and Next Week

Next Week

December 19, 2014

Holiday closures dominate the week ahead.  Japan will be closed for the Emperor’s birthday on Tuesday but then one of the few markets open for the remainder of the week.  Most markets will be Thursday for Christmas, and many stay shut Friday for Boxing Day or Saint Stephen’s Day. Among key central banks, only Turkey […] Read Article

Central Bank Watch

Bank of Japan Board Keeps Settings and Upgrades Assessment

December 19, 2014

After meeting for five hours 51 minutes on Thursday and Friday, the BOJ retained the augmented quantitative stimulus guidelines agreed by an 8-1 vote at its October 31 meeting.  Takahide Kiuchi dissented again, as he favors reverting back to the less aggressive stimulus settings before October 31.  Somewhat surprisingly, the Board’s economic assessment was upgraded, […] Read Article

Deeper Analysis

FOMC Statement: Some Observations

December 17, 2014

The statement released after the FOMC’s eighth and final meeting of 2014 expressed more optimism in labor market trends, deleting the qualifying adjective “somewhat” from improving labor market conditions and replacing “gradually diminishing” with “continues to diminish” in the comment about underutilization of labor resources. Sub-target inflation attributed only “partly” to declining energy prices, meaning […] Read Article

New Overnight Developments Abroad - Daily Update

Weaker Yen and European Stocks, Stronger Asian Equities, and Firmer Oil

December 19, 2014

A volatile week in the marketplace has seen more swings on Friday, but dollar movement against the majors has been less than 0.3% except for a 0.4% drop in the yen. Share prices in the Pacific Basin advanced by 2.5% in Australia, 2.4% in Japan, 1.7% in South Korea, 1.3% in Hong Kong, 1.1% in […] More

Central Bank Watch

Swiss National Bank Re-introduces a Negative Interest Rate

December 18, 2014

Just a week after a quarterly Swiss monetary policy review that left settings unchanged, Swiss authorities in an unscheduled action adopted a negative 0.25% sight deposit rate, versus zero before, and changed the targeted 3-month Swiss Libor target to -0.75% to +0.25%.  The range previously had been 0-0.25% since August 11, 2011, and a one-sided […] More

Central Bank Watch

Taiwanese Central Bank Interest Rates Left Unchanged

December 18, 2014

The discount rate at the Central Bank of The Republic of China has been at 1.875% since five successive 12.5-basis point hikes between June 2010 and June 2011 raised such from a prior 56-year low of 1.25%.  The fourteen ensuing quarterly policy reviews have left the rate unchanged, including today’s.  A released statement after this […] More

New Overnight Developments Abroad - Daily Update

Fresh Distractions

December 18, 2014

The Yellen press conference gave reassurance to a market unsure of the direction of Fed policy, and it triggered strong gains in stocks and the dollar plus a rebound in long-term interest rates.  But now the market has moved on to new distractions. The Swiss National Bank at an unscheduled meeting and just a week […] More

Foreign Exchange Insights and Next Week

Dollar Supported by Economic and Geopolitical Developments

December 17, 2014

Plunging Oil Prices:   As Fed Chair Yellen opined today, oil prices have declined substantially in a short period of time, surprising the FOMC and most of the financial markets with the abruptness and severity of the the drop.  There are numerous and mixed ways that such a change will affect the U.S. and other economies.  […] More

Central Bank Watch

Czech National Bank

December 17, 2014

Monetary policy was not changed further at this month’s meeting of the CNB Board.  The last cut of the two-week repo rate, a 20-basis point reduction from 0.25% to 0.05%, was enacted in November 2013.  A year after that, monetary stimulus was enhanced when a one-sided 27 koruna per euro target was imposed.  With the […] More

Central Bank Watch

FOMC Preview

December 17, 2014

In the seven weeks since the late October FOMC meeting, the price of West Texas Intermediate oil has plunged 32.7%, and the 10-year Treasury yield has fallen by 25 more basis points.  Consumer prices in the five months since mid-2014 contracted 0.7% at an annualized rate, and core CPI rose only 1.1% annualized, which is […] More

Central Bank Watch

Bank of Thailand

December 17, 2014

The previous four meetings of Thailand’s Monetary Policy Committee on April 23, June 18, August 6, and September 17 had retained a 2.0% benchmark interest rate and so did today’s, although the 5-2 vote included two cast in favor of a 25-basis point cut.  Officials at the Bank of Thailand released a statement whose majority  […] More

New Overnight Developments Abroad - Daily Update

Awaiting the FOMC Statement and Yellen’s Press Conference

December 17, 2014

Stocks are lower and the dollar is firmer ahead of today’s FOMC news and the release of some U.S. data.  There’s already been some central bank news in the U.K., Czech Republic and Thailand.  The Asian Development Bank bumped projected 2015 growth and inflation in developing Asia slightly lower, and Japanese trade data for November […] More

Central Bank Watch

Magyar Nemzeti Bank: No Policy Change Likely for Considerable Time Longer

December 16, 2014

In 24 consecutive increments from August 2012 through July 2014, Hungary’s central bank base rate was cut from 7.0% to 2.1%, topped off by a 20-basis point reduction in the final step.  There have now been five successive meetings with no rate change, and today’s statement, which asserts that Inflation in Hungary is likely to […] More

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