New Overnight Developments Abroad - Daily Update

A Fresh Wave of Risk Aversion

March 22, 2019

There’s been a big move into safe assets, reflecting three developments since Wednesday: The Fed’s decision was more dovish than expected, putting interest rate normalization on hold for all of 2019 and ending the balance sheet rundown after September. EU leaders put Britain on a short leash to decide on its Brexit plan. While March […] Read Article

Foreign Exchange Insights and Next Week

Next Week

March 22, 2019

Central Banks: Policy meetings in Mexico, New Zealand, South Africa, Chile, Hungary and the Czech Republic. Many Fed officials have public speaking engagements including Harker, Rosengren, Clarida, Williams, Quarles, Evans, George and Bullard.  ECB President Draghi, Vice President DeGuindos, and Executive Board members Praet and Mersch also will be speaking. So will Ellis and Kent […] Read Article

Central Bank Watch

Russian Central Bank Indicates Interest Rate May Be Cut Later this Year

March 22, 2019

The Central Bank of the Russian Federation maintained a one-week repo rate of 7.75% after its latest monetary policy review. The key interest rate was increased a quarter of a percentage point twice last year in September and then in December, but a statement released today revised projected inflation this year downward by 0.3 percentage […] Read Article

Deeper Analysis

U.S. Manufacturing Conditions Grew Significantly more Slowly in February, Narrowing Edge Versus Euroland

March 1, 2019

The ISM-compiled U.S. manufacturing purchasing managers index declined 2.4 index points to 54.2, a 27-month low. That was twice as large as the 1.2-point drop in the IHS-compiled euro area manufacturing PMI to a 68-month low of 49.3. As a result, the differential between the two data series narrowed by 1.2 points to 4.9, as […] Read Article

Central Bank Watch

Bank of England’s Policy Settings Unchanged

March 21, 2019

The Bank of England as expected did not change its 0.75% Bank Rate, which earlier had been raised twice by 25 basis points, initially in November 2017 and then in August 2018 to 0.75%, highest since March 2009. Nor were quantitative policy tools modified, and both decisions were made unanimously as expected. In a released […] More

Central Bank Watch

Swiss National Bank Keeps Policy the Same but Lowers Projected CPI Inflation Path

March 21, 2019

At the latest quarterly review of Swiss monetary policy, SNB officials kept policy unchanged. Since January 2015, when the automatic cap on Swiss franc was lifted and the interest rate target was cut by 50 basis points, the 3-month Libor rate target band has been an all-negative range of minus 1.25% to minus 0.25%, the […] More

Central Bank Watch

Bank of Norway Tightens

March 21, 2019

The Bank of Norway’s policy interest rate was lifted 25 basis points to 1.0%. Norway is an oil producer and exporter and benefits from the firmer trend lately in that commodity. Growth has been solid, according to a released statement.  Capacity usage is running a bit above normal, and core CPI inflation is somewhat higher […] More

New Overnight Developments Abroad - Daily Update

Theme of the Day: Slowing Global Growth

March 21, 2019

Since the Federal Reserve’s policy decision and press conference yesterday, there’s been a parade of other central bank policy meetings. Although only Norway changed its policy rate — a hike no less — the running theme in the many central bank statements is that the slowdown in global demand late last year is continuing and […] More

Central Bank Watch

FOMC No Longer Inclined to Hike Fed Funds Rate This Year

March 20, 2019

Today’s released FOMC statement asserts that the slowdown of growth in the final quarter of 2018 persisted in the early going of 2019. Headline inflation has declined, too, and market-based measures of inflation compensation “have remained low in recent months.” The final three paragraphs of the statement are identical to the one from January 30th. […] More

Central Bank Watch

FOMC Preview

March 20, 2019

Over the seven weeks since the last FOMC meeting, the dollar and price of oil have strengthened. Share prices recovered additionally, but the 10-year Treasury yield has fallen back 13 basis points. Forward guidance in the January 30th statement was less hawkish, deleting the previous assertion that further gradual increases in the target interest rate […] More

New Overnight Developments Abroad - Daily Update

Financial Market News Cycle Headed by FOMC, Brexit, and U.S./Sino Trade Talks

March 20, 2019

Today’s FOMC announcement at 14:00 EDT (18:00 GMT) will be accompanied by updated forecasts and followed at 14:30 by Chairman Powell’s press conference. Analysts look for scaled-back growth and inflation forecasts, fewer interest rate hikes this year than indicated earlier, and a stop in quantitative tightening. British Prime Minister May is asking for a 3-month […] More

New Overnight Developments Abroad - Daily Update

More Brexit Confusion, Brighter Data, and an FOMC Meeting

March 19, 2019

The dollar stayed in neutral gear overnight, dipping 0.1% against the euro, sterling, and kiwi, holding flat relative to the yen, yuan and Swiss franc, and nudging up 0.1% vis-a-vis the Aussie dollar. Slightly bigger dollar dips occurred of 0.4% relative to the loonie and 0.2% versus the Mexican peso. Asian stock markets likewise didn’t […] More

New Overnight Developments Abroad - Daily Update

Another Possibly Terrorist Shooting

March 18, 2019

As the last business week ended on Friday, investors learned of a terrorist shooting by a neo-nazi at a mosque in New Zealand that killed 50 people, and today brings news of another shooting some 11,670 miles away on a tram in The Netherlands that is also believed to be the work of a terrorist. […] More

Foreign Exchange Insights and Next Week

Next Week

March 15, 2019

Central Banks: In the week of March 18-22, monetary policy reviews are scheduled in the United States, U.K., Switzerland, Iceland, Norway, Russia, Brazil, Colombia, Indonesia, Taiwan, Thailand, and the Philippines. Fed Chairman Powell, Bank of England Governor Carney, SNB President Jordan, and Kent and Bullock of the Reserve Bank of Australia speak publicly. Minutes from […] More

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