New Overnight Developments Abroad - Daily Update

Market Calm on Wednesday Proved Short-Lived

June 21, 2018

The upbeat view regarding saber-rattling over trade never made much sense and in hindsight was just a rationalization by traders to explain calmer conditions yesterday. Trade war fear is back in the spotlight today. In the ensuing scramble for safety over investment return has seen Share prices fall by 1.4% in Germany, 1.1% in France, […] Read Article

Foreign Exchange Insights and Next Week

Next Week

June 15, 2018

Central Banks: Monetary policy reviews in the U.K., Switzerland, Thailand, Taiwan, The Philippines, Brazil, Mexico, Norway and Hungary. Release of Bank of Japan minutes. Fed officials speaking publicly include Powell, Bullard, Dudley, Bostic, and Williams. Other central bankers speaking in public include Draghi, Praet, Lautenschlaeger and Coeure of the ECB, Governor Kuroda of the BOJ […] Read Article

Central Bank Watch

Bank of Thailand: No Change

June 20, 2018

Thailand’s one-day repo rate was kept at 1.5% by a vote of 5-1. It’s been at that level since a 25-bp cut in April 2015. Unlike some Asian economies, Thailand runs a current account surplus. Inflation still lies below the 1-4% target midpoint. Officials took this occasion to raise projected GDP growth this year and […] Read Article

Deeper Analysis

FOMC Preview

June 13, 2018

The Federal Open Market Committee is widely expected to enact its second 25-basis point increase in the federal funds target of 2018 and the seventh since December 2015. That will bring the target ceiling to 2.0% for the first time since a cut in October 2008 just four weeks after the collapse of Lehman Brothers. […] Read Article

New Overnight Developments Abroad - Daily Update

Calmer Waters

June 20, 2018

Share prices recovered 1.2% in Japan and Australia, 1.0% in South Korea, 0.7% in India, 0.4% in Hong Kong and 0.3% in China. U.S. and European equities have rebounded more moderately. The spin on a possible trade war is that the harsh rhetoric from officials in the U.S. and China is just threat to secure […] More

New Overnight Developments Abroad - Daily Update

Intensifying Fear of a Trade War Generating Stampede from Risky Assets

June 19, 2018

Today’s story lies in market movement, not fresh economic news. The DOW, German Dax and Paris Cac have dropped over 1.0%. Chinese share prices plunged 3.8%. The Hang Seng lost 2.8%. Japan’s Nikkei closed down 1.8%, and the South Korean Kospi fell by 1.5%. The 10-year Treasury yield slid another 3 basis points and is […] More

New Overnight Developments Abroad - Daily Update

Trade War Concerns and Immigration Tensions Rattle Markets Further

June 18, 2018

Share prices fell 1.2% in South Korea and 1.0% in Singapore. In Europe, stocks have thus far dropped 1.4% in Germany, 1.2% in France, 1.1% in Switzerland, 1.0% in Spain, 0.9% in Italy and 0.4% in the U.K.. Markets were closed today in China, Taiwan, and Hong Kong for the Dragon Boat Festival and remained […] More

Central Bank Watch

Bank of Japan Leaves Policy Unchanged, Downgrades Inflation Outlook

June 15, 2018

Following four hours six minutes of discussion on Thursday and Friday, the Bank of Japan Board voted 8-1 to maintain its policy of quantitative and qualitative monetary easing with yield curve control. The key elements of this stance are A negative 0.1% short-term policy interest rate target. A target of around zero percent on the […] More

Central Bank Watch

Bank of Russia Retains 7.25% Main Interest Rate

June 15, 2018

Russian monetary easing is on pause. The rate had been last cut by 25 basis points in both February and March and before that by a full percentage point during March-June of 2017 and 125 basis points during the final quarter of last year. But after leaving the one-week repo rate at 7.25% following this […] More

New Overnight Developments Abroad - Daily Update

More Trouble

June 15, 2018

President Trump has approved a 25% tariff on $50 billion of Chinese imports. The Bank of Japan gave a gloomier assessment of inflation, downgrading its range to 0.5-1.0% from around 1.0% and observing that medium-term and long-term inflation expectations aren’t escaping a deflationary mindset. Policy settings were left unchanged, and an extremely accommodative stance seemingly […] More

Central Bank Watch

ECB Decisions and Draghi Press Conference

June 14, 2018

Investors found the ECB message today somewhat more dovish than feared. To be sure, the released introductory statement confirmed that new asset purchases will be completed by the end of this year. Draghi’s statement asserts that “progress towards a sustained adjustment in inflation has been substantial so far. With longer-term inflation expectations well anchored, the […] More

Central Bank Watch

Monetary Policy on Hold at Central Bank of Chile

June 14, 2018

The monetary policy rate has been 2.5% since four 25-basis point cuts implemented within the first five months of 2017, and yesterday’s decision announced late in the day again resulted from a unanimous vote. Officials released a statement that revised the near-term inflation forecast upward due to oil price developments and a depreciated Chilean peso, […] More

New Overnight Developments Abroad - Daily Update

Risk-Off Mood in Financial Marketplace

June 14, 2018

Investors are reacting Thursday to An increasing likelihood of four Fed rate hikes this year and three more in 2019 following yesterday’s federal funds rate increase and hawkish press conference. News today from the European Central Bank that monthly asset buying will be sliced in half to EUR 15 billion from October and eliminated altogether […] More

Central Bank Watch

FOMC Statement and Forecasts

June 13, 2018

Today’s FOMC statement raises the federal funds rate by 25 basis points to a target of 1.75-2.0%, depicts a tighter labor market, upgrades the assessment of personal consumption recent conditions, and deletes the prior observation that market-based measures of inflation are low. The statement also introduces the assertion that inflation consistent with the Committee’s symmetric […] More

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