New Overnight Developments Abroad - Daily Update

Waiting for Yellen

May 27, 2016

Markets await clarification of FOMC policy when Chair Yellen speaks today at Harvard. The dollar rose 0.5% against the loonie but is otherwise very narrowly mixed. West Texas Intermediate oil and Comex gold fell by 0.7% to $49.12 per barrel and 0.2% to $1,217.80 per ounce. The 10-year German bund yield is two basis point lower […] Read Article

Foreign Exchange Insights and Next Week

Next Week

May 27, 2016

Central Banks:  Central Bank of Iceland and European Central Bank hold policy meetings.  ECB President will preside over a press conference, and new macroeconomic forecasts are due.  The Fed releases its Beige Book, and Kaplan, Evans, Bullard and Powell are Fed officials with speaking engagements in the week.  Holidays and Special Releases:  U.S. and British […] Read Article

Central Bank Watch

Fourth Ukraine Central Bank Interest Rate Cut in Nine Months

May 26, 2016

The National Bank of Ukraine Board announced a one percentage point reduction in its key interest rate to 18%, which was smaller than cuts of 3 percentage points (ppts) in August 2015, 5 ppts in September 2015, and 3 ppts in April 2016.  A statement explaining today’s decision speaks of continuing disinflation due to the […] Read Article

Deeper Analysis

Sterling and Brexit

May 16, 2016

A referendum to decide whether Great Britain remains in the European Union is scheduled for June 23, just over five weeks away.  Economic experts and other pundits both within the U.K. and in the wider world community widely predict that a verdict to leave the EU would be disastrous both in the immediate term and […] Read Article

New Overnight Developments Abroad - Daily Update

Firmer Commodity Prices

May 26, 2016

Crude oil (+0.7%) and a wide spectrum of industrial metal prices firmed overnight.  WTI touched a high of $49.97 per barrel, and brent surpassed $50.00. St. Louis Fed President James Bullard is the latest Fed official to indicate that a June interest rate hike may be in play.  He spoke of tightening U.S. labor market […] More

Central Bank Watch

Bank of Canada

May 25, 2016

The Canadian central bank overnight interest rate target was left unchanged as expected.  It’s been 0.50% since the second of two 25-basis point cuts last July.  The first one was done in January, and those were the only changes since a trio of consecutive tightenings in June, July and September of 2010.  A statement explaining […] More

New Overnight Developments Abroad - Daily Update

Several Pieces of Good News

May 25, 2016

Yesterday’s strong performance in North American equities carried over into Pacific Rim and European markets today.  Japan’s Nikkei closed 1.6% higher.  Shares also climbed 2.7% in Hong Kong, 2.3% in India, 1.5% in Australia, 1.3% in Indonesia, 1.2% in South Korea and Taiwan and 0.7% in New Zealand.  The Shanghai composite index dipped 0.2%, however, […] More

Central Bank Watch

Magyar Nemzeti Bank

May 24, 2016

Hungary’s Base Rate was cut to 0.90% from 1.05% in a third consecutive reduction of 15 basis points.  The overnight lending rate also got sliced by 15 basis points, while the overnight deposit rate was retained at -0.05%.  More important, a statement from Hungary’s Monetary Council signaled an end to the latest string of base […] More

Central Bank Watch

Central Bank of the Republic of Turkey

May 24, 2016

As done at the prior meeting on April 20, monetary officials in Turkey left the one-week repo rate and overnight borrowing rate unchanged at 7.5% and 7.25%, respectively, but lopped 50 basis points off the overnight marginal funding rate to 9.5%.  The overnight rate corridor has but narrowed by 125 basis points since the March […] More

New Overnight Developments Abroad - Daily Update

Pound Up on Reduced Brexit Fears

May 24, 2016

A new phone poll by Daily Telegraph revealed a widening margin of voters favoring Britain staying in the European Union (55% to 42%), and sterling rose 0.9% against the dollar in response. The U.S. currency otherwise climbed 0.9% against the Aussie dollar, 0.6% versus the kiwi, 0.3% vis-a-vis the euro and yen, 0.2% relative to […] More

Central Bank Watch

Bank of Israel

May 23, 2016

Like the fourteen previous monthly monetary policy meetings, this month’s decision was to keep the key Israeli central bank rate at a lowly 0.1%.  Four four straight calendar years (2011-14), it was reduced by 75 basis points, and those three cumulative percentage points of easing were topped off by a 15-basis point cut in February […] More

Foreign Exchange Insights and Next Week

Currency Management Norms Under Threat

May 23, 2016

A statement released April 15 by G20 finance ministers and central bank governors reaffirmed a position against currency manipulation that represents a coordinated stance that’s been in place already for a long time: Excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.  We will consult closely on […] More

New Overnight Developments Abroad - Daily Update

A Newsworthy Start to the Week

May 23, 2016

At the weekend meeting in Japan of Group of Seven finance ministers and central bankers, participants disagreed over the yen, expressed concern about Brexit and, more generally, the outlook for global growth, and pledged coordinated effort to prevent the financing of terrorism.  U.S. Treasury Secretary Lew towed the precedent pledge not to engage in competitive […] More

Foreign Exchange Insights and Next Week

Next Week

May 20, 2016

Central Banks:  Monetary policy meetings in Canada, Turkey, Hungary, Israel and Ukraine.  Fed Chair Yellen heads a list of U.S. central bank officials speaking publicly that also includes Kaplan, Kashkari, Bullard, Powell, Harker, and Williams.  Praet and Constancio of the European Central Bank, Stevens and DeBelle of the Reserve Bank of Australia, and Nakaso of […] More

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