New Overnight Developments Abroad - Daily Update

Other Realities Like Soft Growth Intrude

September 23, 2016

Markets had by and large enjoyed a good week through Thursday, buoyed by the dovish decisions of the Fed and Bank of Japan. Compared to closing levels last Friday, 10-year sovereign debt yields are down eight basis points in the United States, 9 bps in Germany, and 16 bps in Great Britain. Stocks had rallied. […] Read Article

Foreign Exchange Insights and Next Week

The Dollar Around U.S. Presidential Elections

September 24, 2016

Currency markets should prepare for a bit of turbulence. It has not been unusual to experience elevated dollar movement against the euro and yen in the final calendar quarter of U.S. presidential election years. The average dollar change against the euro between end-September and end-year in the past four election years was 4.9% but would […] Read Article

Central Bank Watch

South African Monetary Policy Stays on Hold

September 22, 2016

Officials at the South African Reserve Bank did not change their 7.0% policy interest rate at the latest review. Such has been at 7.0% since the last of six increases made in March of this year. That move culminated a tightening of policy from a 5.0% rate at the end of 2013. An improved inflation […] Read Article

Deeper Analysis

FOMC Preview

September 21, 2016

Since the last FOMC statement on July 27, the dollar, share prices and the 10-year Treasury price have fallen. The Treasury yield and price of oil have climbed. Investors await the FOMC statement at 18:00 GMT today, which is to be accompanied by new forecasts and followed by a Janet Yellen press conference at 18:30 […] Read Article

Foreign Exchange Insights and Next Week

Next Week

September 23, 2016

Central Banks: Monetary policy meetings will take place in the Czech Republic, Romania, Mexico, Colombia, Taiwan and Israel. Minutes from the Bank of Japan’s late-July Board meeting will be published. Yellen, Bullard, Evans, George, Kaplan, Powell, Harker, and Mester are scheduled to speak publicly during the week. So are ECB President Draghi, Bank of Canada […] More

Central Bank Watch

Central Bank of the Republic of Turkey

September 22, 2016

Both the overnight marginal funding rate and late liquidity lending rate have been cut by 25 basis points to 8.25% and 9.75%. The 7.5% one-week repo rate and 7.25% overnight borrowing rate were not changed. These moves constitute both and easing of the policy stance and a “measured and cautious” further step toward simplification of […] More

Central Bank Watch

Bank Indonesia

September 22, 2016

The 7-day reverse repo rate, which has replaced the BI rate as the main operative central bank interest rate, was sliced further to 5.0% at this month’s meeting. According to a released statement, the action coordinates with the government’s efforts to buttress economic growth that’s been somewhat lower than hoped and assumed. Inflation at 2.8% […] More

Central Bank Watch

Bangko Sentral ng Pilipinas Leaves Filipino Central Bank Interest Rates Unchanged

September 22, 2016

A narrower interest rate corridor framework for monetary policy in The Philippines was adopted in June. A policy meeting in August did not change settings, which were also maintained after this month’s meeting. An overnight reverse repo rate of 3.0% is flanked by an overnight deposit rate of 2.5% and an overnight 3.5% lending rate. […] More

Central Bank Watch

Norges Bank

September 22, 2016

Norway’s central bank policy rate has been 0.50% since a 25-basis point cut in March. Norway is one of several economies in which monetary policy began to be tightened in the post-Great Recession economic recovery but had to be rescinded subsequently when the economy did not react well. The last cyclical low of 1.25% lasted […] More

Central Bank Watch

Reserve Bank of New Zealand: No Rate Change this Time but More Ease Possible in the Future

September 22, 2016

New Zealand’s Official Cash Rate, which had been cut this year by 25 basis points each in March and August, was left at the record low of 2.0%. There also had been four 25-bp reductions during 2015 and four increases of like amount during 2014. A statement released by Governor Wheeler today reiterated that the […] More

New Overnight Developments Abroad - Daily Update

Central Banks Setting the Market Tone

September 22, 2016

Yesterday’s eagerly awaited Federal Reserve and Bank of Japan meetings have been followed today by monetary policy decisions in New Zealand, Norway, The Philippines, Indonesia and Turkey with South Africa and public comments from ECB President Draghi still to come. Overall, the tone from central banks has been dovish, creating incentives for funds to gravitate […] More

Central Bank Watch

Reflections on Yellen’s Press Conference

September 21, 2016

Markets reacted well. Shortly after the end of the press conference and some 95 minutes after the release of the FOMC statement and forecasts, the 10-year Treasury yield over the whole span of that time was four basis points lower than at the start of the period. U.S. share prices had risen 0.7%, and the […] More

Central Bank Watch

FOMC Statement and Forecasts

September 21, 2016

The statement elevates the risk of a coming rate hike in two ways but left the federal funds rate target at a range of 0.25 – 0.50%. A new sentence was inserted that the “Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, […] More

Central Bank Watch

Bank of Japan Changes Policy Framework

September 21, 2016

The BOJ Board released several documents in conjunction with the unveiling of a new policy orientation that is packaged to appear like a more substantive change than it really is. The released papers include A summary of decisions made, listing of dissenting votes, and two attachments. The first of these presents the BOJ staff’s “comprehensive […] More

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