New Overnight Developments Abroad - Daily Update

Paused Rise of Dollar and Sovereign Debt Yields but Commodity Rally Continued Overnight

April 24, 2018

The dollar slipped overnight by 0.2% against the Aussie dollar and sterling and 0.1% versus the euro. The kiwi and yen fell 0.3%, while the loonie is flat. The ten-year Treasury yield eased back a basis point and, at 2.97%, remains below the key 3.0% threshold. Ten-year German bund, British gilt and Japanese JGB yields […] Read Article

Foreign Exchange Insights and Next Week

False Claims

April 16, 2018

The experience of 45 years since governments in the major economies adopted a system of market-determined flexible exchange rates has taught officials to treat currency policy as a delicate matter. The less that is said by officials about their own or other currencies, the better. Currency policy in the United States falls under the jurisdiction […] Read Article

Central Bank Watch

Bank of Israel Retains 0.10% Policy Interest Rate

April 16, 2018

The last central bank interest rate change in Israel was a cut of 15 basis points in February 2015 to 0.10%. Previously the rate had been lowered by 75 basis points per year in 2011-14. The latest policy review reaffirmed the need for continuing an accommodative stance. Although inflation early in 2018 was a shade […] Read Article

Deeper Analysis

U.S. Nonmanufacturing PMI Survey and Euroland Services PMI Survey Show Slower Rates of Expansion in March

April 5, 2018

The ISM-compiled U.S. non-manufacturing purchasing managers index slipped back 0.7 points to a 3-month low in March 0f 58.8, which was still very robust. Increases of 1.6 points in the employment sub-index and 0.5 points in prices mitigated declines of 5.3 points in orders and 2.2 points in sales. The IHS-compiled Euroland services PMI dropped […] Read Article

New Overnight Developments Abroad - Daily Update

Lessening Inflation in Europe and Some Significant Meetings

April 18, 2018

Japanese Prime Minister Abe and President Trump are meeting in Florida. CIA Director Pompeo, who has been nominated by Trump to be Secretary of State, met secretly with North Korean President Kim Jong-Un, to decide arrangements for Kim’s historical talks next month with Trump. Investors perceive lessening geopolitical tension. British CPI inflation in March fell […] More

New Overnight Developments Abroad - Daily Update

Some Data Surprises

April 17, 2018

There’s been a surprisingly large downward revision in Japanese industrial production during February from an increase of 4.1% reported initially to a zero percent month-on-month change. That flat performance follows a 3.1% drop recorded in January and left output just 1.6% higher than a year earlier. By comparison, industrial production posted a 4.3% on-year advance […] More

New Overnight Developments Abroad - Daily Update

Long-Term Interest Rates Climb Higher

April 16, 2018

Softer sovereign debt prices (higher yields) are the most consistent and significant market development this Monday. The week ahead will feature the semi-annual IMF/World Bank meetings and quarterly earnings reports from many companies. 10-year sovereign debt yields are up four basis points in the U.K. and three bps each in Germany and the United States. […] More

Foreign Exchange Insights and Next Week

Next Week

April 13, 2018

Special Events: Semi-annual IMF/World Bank Meetings will be running throughout the week in Washington, DC. Highlights of the gathering will include publication of the World Economic Forum, a press conference on Thursday by IMF Managing Director Lagarde, and a Group of Twenty press conference on Friday. A meeting of EU finance ministers will occur on […] More

Central Bank Watch

Monetary Authority of Singapore’s Semi-Annual Policy Review

April 13, 2018

Monetary policy in Singapore is subordinated to the enforcement of a targeted exchange rate corridor. Officials do this by specifying three variables: the width of the Singapore dollar’s (SGD) prescribed trading corridor, the mid-point of the corridor, and the corridor’s upward or downward slope over time. In the face of downgraded growth and inflation prospects, […] More

New Overnight Developments Abroad - Daily Update

Continuing Uncertainty Over U.S. Trade Policy and Response to Syria

April 13, 2018

Markets mostly marked time so far this Friday, confused by President Trump’s reinterest in the Trans Pacific Partnership and ambiguous tweet regarding the U.S. response to the Syrian government’s chemical attack. Investors now await reports on first-quarter corporate earnings. The dollar was narrowly mixed overnight, firming 0.4% against the Swiss franc, 0.3% relative to the […] More

Central Bank Watch

Central Reserve Bank of Peru

April 12, 2018

Being an even-numbered calendar month, Peru’s central bank board did not change its policy interest rate in April. The last six reductions, each by 25 basis points, were made at scheduled monthly meetings in the even months of May, July, September, November, January and March. The rate is now at 2.75%, and the statement accompanying […] More

Central Bank Watch

Bank of Mexico Keeps Policy Rate at 7.5%

April 12, 2018

Mexican monetary isĀ  focused on on strengthening the anchoring of medium- and long-term inflation expectations and achieving the convergence of actual inflation on the 3.0% target. In response to the steep depreciation of the peso as candidate and then U.S. President Trump espoused an anti-Mexican agenda both in regard immigration and trade policy. The peso’s […] More

Central Bank Watch

National Bank of Ukraine Decides Policy Now Sufficiently Tight

April 12, 2018

From last October to the start of March, Ukraine’s policy interest rate was increased 450 basis points to 17.0% in just four incremental moves. That tightening abruptly reversed a prolonged easing stance, the last element of which was a 50-bp cut last May. The reason for this reversal was a rise of inflation to well […] More

Central Bank Watch

National Bank of Serbia

April 12, 2018

The latest in a multiyear series of cuts in Serbia’s key policy interest rate has reduced such to 3.0% from 3.25%. There was also a 25-basis point cut in the March monthly meeting and, before that, a 50-basis point cut last October. Previous rate cuts totaled 2.75 percentage points in the final eight months of […] More

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