New Overnight Developments Abroad - Daily Update

All Quiet on the Scottish Front

September 19, 2014

The referendum on Scottish independence was defeated by a 55-45% vote and in 28 of 32 constituencies.  In relief, the British Ftse has risen 0.7%.  Equities advanced 1.6% in Japan, 0.7% in China, 0.6% in Hong Kong, 0.5% in New Zealand, 0.4% in Indonesia and 0.3% in South Korea and Australia.  The German Dax and […] Read Article

Foreign Exchange Insights and Next Week

Next Week

September 19, 2014

This weekend, New York City will be the venue of the People’s Climate March in advance of a summit on what can be done to save the planet, a general election in New Zealand is planned, and G-20 finance ministers and central bankers will be meeting in Cairns, Australia. Japanese markets will be closed Tuesday […] Read Article

Central Bank Watch

South African Reserve Bank

September 18, 2014

The statement released by Governor Marcus of the South African Reserve Bank outlines numerous economic imbalances.  CPI inflation of 6.4% is hovering near the target ceiling, yet GDP growth, hurt by crippling labor strikes, is now expected to be just 1.5% this year.  The current account deficit last quarter surpassed 6.2%, and the budget deficit […] Read Article

Deeper Analysis

FOMC Preview: How Markets Were Guided Before the Last Rate Normalization

September 16, 2014

Fed officials have already prepared investors to expect a change in forward policy guidance language that will steer markets to an initial Fed funds rate hike around next March or April.  Rate normalization will then commence, by which is meant the transformation of policy from the current stance that promotes faster economic growth and higher […] Read Article

Central Bank Watch

Swiss National Bank: Review Identifies a Considerable Deterioration of the Economic Outlook

September 18, 2014

The quarterly monetary policy review Revised projected 2014 growth to “slightly less than 1.5% from 2.0%, noting negative annualized growth of minus 0.2% last quarter. Opined that global recovery in coming quarters will be weaker than forecast previously and remains vulnerable to setbacks. Called the Swiss franc “still high” but did not change the 1.2000 […] More

Central Bank Watch

Norwegian Monetary Policy Unchanged

September 18, 2014

The Executive Board of Norges Bank left its key interest rate at 1.5%.  This was the fifteenth consecutive meeting to decide that policy didn’t need changing, and at 1.5% such is just 25 basis points above the Great Recession low.  Seven reductions between October 2008 and June 2009 had cut the interest rate to 1.25% […] More

Central Bank Watch

Central Bank of Malaysia Keeps 3.25% Monetary Policy Interest Rate

September 18, 2014

In a process toward policy rate normalization, five central bank rate hikes were engineered very gradually in March, May and July 2010, May 2011 and, most recently, July of this year.  This week’s meeting, however, ended in a decision not to change the current stance and the release of a statement that calls the stance […] More

New Overnight Developments Abroad - Daily Update

Many Balls in the Air

September 18, 2014

There is much for investors to watch this Thursday. A Scottish referendum on independence will determine the future of Great Britain and have implications far beyond the Commonwealth.  The vote is considered too close to predict, although latest polls suggest a marginal edge toward rejections. Markets continue to react to yesterday’s FOMC hand-outs and press […] More

Central Bank Watch

Comments on FOMC Press Conference

September 17, 2014

Three documents were released. The FOMC statement was notable for two things.  Policy guidance was not changed, and there were two dissenters (Richard Fisher as well as Charles Plosser).  The FOMC majority continued the assertion that it “likely will be appropriate to maintain the current target range for the federal funs rate for a considerable […] More

Central Bank Watch

Bank of Thailand Interest Rate Left Unchanged

September 17, 2014

For a fourth straight time, the Thai central bank policy interest rate was kept unchanged at 2.0%, and no adjustement seems nearby.  The last one was a 25-basis point cut in March, which was the sixth such reduction since a peak of 3.5% between August 2011 and November 2011.  After the latest meeting, officials released […] More

Foreign Exchange Insights and Next Week

Checklist of Economic Fundamentals Supports a Buoyant Dollar

September 17, 2014

Currency analysts approach the task of forecasting by reviewing a checklist of economic vital signs, the so-called fundamentals.  Likewise, when officials complain that their currency is either too strong or too weak, the argument is based on a grading system that considers around seven comparative measures of fundamental economic performance.  The ratings involve inflation, short-term […] More

New Overnight Developments Abroad - Daily Update

Awaiting FOMC Pronouncements and Some Relief from Chinese Stimulus

September 17, 2014

Markets continue to react to yesterday’s news that the People’s Bank of China is creating a standing liquidity facility for the five biggest Chinese banks totaling 500 billion yuan or roughly $81 billion. In the meantime, investors await today’s FOMC statement, updated macroeconomic forecasts and Janet Yellen’s press conference.  The two first items are due […] More

New Overnight Developments Abroad - Daily Update

Central Bankers in Spotlight

September 16, 2014

The Federal Open Market Committee begins a 2-day policy meeting today.  Chair-person Janet Yellen holds a press conference Wednesday.  Macroeconomic forecasts will be presented, and new forward guidance language is anticipated. Bank of Japan Governor Kuroda said the yen’s depreciation had on balance done more good than bad for Japan’s economy.  Some firms had complained […] More

New Overnight Developments Abroad - Daily Update

Aussie Dollar Hammered by Chinese Data

September 15, 2014

The Australian dollar fell by 0.8% against its U.S. counterpart, which otherwise edged up 0.2% versus the euro and Swiss franc and 0.1% relative to the Chinese yuan and sterling but also slipped 0.1% vis-a-vis the yen, Canadian dollar and kiwi. A lot of Australian exports go to China, which reported only a 6.9% year-over-year […] More

css.php