New Overnight Developments Abroad - Daily Update

Weak Japanese Data and a New Low in German 10-Year Bund Yield

July 29, 2014

Although unchanged on balance, the bund touched 1.119% overnight, which was even below the prior record low of 1.127% in June 2012. Japanese real household spending and retail sales posted third on-year declines in a row, while jobless rate rose to a five-month high. On the geopolitical tension front, Israel intensified its offensive against Gaza, […] Read Article

Foreign Exchange Insights and Next Week

Next Week

July 25, 2014

Central bank interest rate policy meetings are being held next week in the United States, Czech Republic, Israel, and the Philippines.  There is no press conference after the FOMC announcement.  Bank of Japan Governor Kuroda and Board member Ishida speak publicly during the week.  The Swiss market is closed next Friday to observe the national […] Read Article

Central Bank Watch

Bank of Israel Engineers Unexpected Interest Rate Cut

July 28, 2014

Israel’s key lending interest rate was lowered to 0.5% from 0.75%.  This was the eleventh such cut since September 2011 and the second of 2014, the other being done five months ago in February.  A released statement justifies the action by citing continuing sub-target CPI inflation, a 0.8% trade-weighted rise of the shekel since the […] Read Article

Deeper Analysis

A Quarter Century Old Disinflation

July 28, 2014

The fear of too much inflation still strikes a more sensitive nerve than the fear of too little inflation.  The basic complaint against the ultra-accommodative monetary policies around the world is that this is a recipe for high inflation in the future.  The writing on the walls, a climb in expected inflation, is predicted to […] Read Article

New Overnight Developments Abroad - Daily Update

Currencies Again Unaffected by Festering Geopolitical Tensions

July 28, 2014

A fleeting cease fire in Gaza has been broken. The U.S. State Department claims to have images of artillery fire from Russian soil against Ukrainian forces. Spokesmen for Japanese Prime Minister Abe deny rumors of cabinet changes. The dollar is unchanged against the yen, loonie, Australian dollar and sterling.  The greenback has edged 0.1% higher […] More

Central Bank Watch

Central Bank of the Russian Federation

July 25, 2014

There’s no such thing as a free war, and a direct consequence of President Putin’s reckless behavior with neighboring Ukraine has been a weak ruble that’s imported inflation and forced the Russian central bank to tighten monetary policy.  This in turn points to slower economic growth.  The key central bank interest rate was earlier hiked […] More

New Overnight Developments Abroad - Daily Update

Japanese CPI, German IFO and Russian Rate Hike Fail to Move Dollar Much

July 25, 2014

The dollar is unchanged against the yuan and sterling and firmer by 0.3% relative to the kiwi, 0.2% versus the loonie, and 0.1% against the euro, Swissie, Australian dollar and yen. Share prices rose 1.1% in Japan and China, 0.4% in New Zealand and South Korea, and 0.3% in Hong Kong, but they have fallen […] More

Foreign Exchange Insights and Next Week

Governments Challenged

July 24, 2014

It a conventional to think that currencies are apt to weaken when governments fail to meet important challenges properly.  Governments these days are struggling to deliver prosperity, peace and world respect.  Soft productivity growth is one of America’s central problems.  It prevents faster growth in jobs from boosting GDP growth, and it could force the […] More

Central Bank Watch

Reserve Bank of New Zealand Engineers a Fourth Interest Rate Hike, Then Declares a Pause

July 24, 2014

As it had done at the three previous meetings, the RBNZ lifted New Zealand’s Official Cash Rate by 25 basis points.  The new 3.5% level compares with 2.5% during the three years to mid-March, and now it is time to put policy on pause for “a period of assessment before interest rates adjust further towards […] More

New Overnight Developments Abroad - Daily Update

PMI’s, Japanese Trade, British Retail Sales, and an Important New Zealand Statement

July 24, 2014

Preliminary purchasing manager survey results for July showed An 18-month high in Chinese manufacturing growth. Faster euro area growth especially in the services but also manufacturing. Slower manufacturing growth in Japan.  Japanese customs trade data for June also were disappointing.  There was an unadjusted JPY 822 billion deficit, which was the 24th shortfall in a […] More

New Overnight Developments Abroad - Daily Update

PMI’s, Japanese Trade, British Retail Sales, and an Important New Zealand Statement

July 24, 2014

Preliminary purchasing manager survey results for July showed An 18-month high in Chinese manufacturing growth. Faster euro area growth especially in the services but also manufacturing. Slower manufacturing growth in Japan.  Japanese customs trade data for June also were disappointing.  There was an unadjusted JPY 822 billion deficit, which was the 24th shortfall in a […] More

New Overnight Developments Abroad - Daily Update

Aussie Dollar Lifted by Higher-than-Forecast CPI

July 23, 2014

Australian consumer prices climbed 0.5% on quarter and to a nine-quarter high of 3.0% on year, which coincides with the 2-3% target ceiling.  The trimmed mean measure of core CPI inflation rose to 2.9% from 2.6% in the first quarter and final quarter of 2013.  There seems little chance of a further monetary policy easing, […] More

Central Bank Watch

Magyar Nemzeti Bank Winds Up Interest Rate Reduction Cycle

July 22, 2014

Hungary’s central bank declared an end to a 2-year easlng cycle after cutting the key rate by more than expected.  A greater-than-forecast reduction of 20 basis points in the bank interest rate to 2.1% put an end to a streak of cuts that included 12 reductions of 25 basis points, 6 of 20 bps, 2 […] More

New Overnight Developments Abroad - Daily Update

Less Risk Aversion

July 22, 2014

Now that Ukraine rebels are handing over the bodies of Flight 17 victims, investors are less fearful about an escalating cold war between Russia and Western powers. Share prices climbed 1.7% in Hong Kong and India, 1.2% in China, 0.8% in Japan, 0.6% in Taiwan, 0.5% in South Korea and 0.1% in New Zealand, Australia […] More

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