New Overnight Developments Abroad - Daily Update

Fresh Decline in Turkish Lira

September 18, 2018

Turkey grabbed the currency market spotlight on a day otherwise devoid of meaningful data to be reported. The lira dropped 2% against the dollar as President Erdogan took aim against opposition party members of IsBank’s Board of Trustees. The lira’s loss erased the recovery that occurred last week after the Turkish central bank sharply raised […] Read Article

Foreign Exchange Insights and Next Week

Next Week

September 14, 2018

Central Banks: Monetary policy reviews in Japan, Brazil, Switzerland, Norway, South Africa, Hungary, and Thailand. Minutes of the last Reserve Bank of Australia policy review to be published. RBA Kent and ECB President Draghi speak publicly. Holidays and Special Events: Japan’s Respect for the Aged Day on Monday. India’s Islamic New Year (Moharram) on Thursday. […] Read Article

Central Bank Watch

Bank of Russia Surprises Market with 25-Basis Point Key Interest Rate Hike to 7.5%

September 14, 2018

According to a statement released by the Board of Directors, inflation is climbing toward 4% faster than expected and inflation expectations have moved slightly higher, warranting today’s decision to implement the central bank’s first rate increase since mid-December of 2014. The peak of 17.0% only was retained for 7 weeks. A series of reductions ensued […] Read Article

Deeper Analysis

U.S. and Euroland Manufacturing Conditions Diverge

September 4, 2018

August saw the widest divergence that I can recall between U.S. factory conditions as measured by the ISM purchasing managers index and factory conditions in the euro area as measured by the IHS PMI. But there is a caveat. IHS also compiles a U.S. manufacturing PMI, and according to that measure, there was a deceleration […] Read Article

New Overnight Developments Abroad - Daily Update

Many Asian Stock Markets Fall at Least 1.0%

September 17, 2018

While Japan was closed for Respect for the Aged Day, share prices elsewhere in Asia dropped 2.1% in China to a 4-year low, 1.8% in Indonesia, 1.6% in Hong Kong, 1.3% in India, 0.7% in South Korea and 0.6% in Singapore. Investors continue to worry about a trade war involving the United States. Stocks softened much […] More

New Overnight Developments Abroad - Daily Update

A Shift from Fixed Income Assets Into Stocks

September 14, 2018

The second week of September came and went without the feared announcement of much higher U.S. tariffs. Even though that danger remains looking ahead, there’s been a return ot riskier assets. Share prices in the Pacific Rim rose 1.2% in Japan today, 1.0% in Hong Kong and Singapore, 1.3% in Indonesia and Taiwan, and 1.4% […] More

Central Bank Watch

ECB Policy Meeting Produces No Surprises or Significant Developments

September 13, 2018

The European Central Bank Governing Council left its policy settings unchanged. The three key interest rates — a zero percent refinancing rate flanked by a -0.40% deposit rate and a 0.25% marginal lending facility rate — will not be increased through the summer of 2019. Asset purchases will total EUR 30 billion this month and […] More

Central Bank Watch

Bank of England Leaves Policy Settings Unchanged

September 13, 2018

A second Bank Rate hike of 25 basis points to 0.75% had been undertaken six weeks ago. The first being of similar size was made last November. The asset purchase program was not changed either, and current limits were reached quite some time ago. Members of the Monetary Policy Committee decided that the current stance […] More

Central Bank Watch

Central Reserve Bank of the Republic of Turkey

September 13, 2018

As telegraphed earlier this month, Turkish monetary authorities tightened monetary policy today in response to the continuing vicious cycle of lira depreciation, which had exceeded 50% year-to-date, and price inflation. They raised the one-week repo rate to 24.0% from 17.75%, exceeded street expectations. This was the fourth increase of 2018 after hikes of 125 basis […] More

New Overnight Developments Abroad - Daily Update

Thursday’s Menu: Central Bank Decisions, Price Data, Hurricane Florence, and a U.S. Offer for a New Round of High Level Trade Talks with China

September 13, 2018

The Central Bank of the Republic of Turkey lifted its key 0ne-week repo rate by a greater-than-expected 625 basis points to 24.0%. The dollar lost 2.8% against the lira afterward and has also fallen 1.0% against the Russian ruble, 1.6% relative to the South African rand, and 0.6% versus the Mexican peso. The Bank of […] More

New Overnight Developments Abroad - Daily Update

Bracing for Hurricane Florence, Higher Tariffs, More Fed Restraint and Ultimately Inflation

September 12, 2018

The Carolinas are expected to be slammed by a storm of historical proportions with 100+ MPH winds, a huge storm surge, and Harvey-like rainfall. Landfall is predicted late Thursday/early Friday. President Trump has hinted that a colossal new round of tariffs may be announced this week. The Federal Open Market Committee’s next policy meeting is […] More

New Overnight Developments Abroad - Daily Update

Stock Prices Heading South

September 11, 2018

Fears that the Sino-U.S. trade war is about to escalate sharply weighed on global stock markets. Another concern is Hurricane Florence, a category 4 storm in the Atlantic that’s headed for landfall in the Carolinas sometime around Friday. Over 1 million people are fleeing their homes. Today is the 17th anniversary of the Al Qaeda […] More

New Overnight Developments Abroad - Daily Update

Difficult Session in Asia but European Markets Are Higher

September 10, 2018

Share prices fell 1.4% in Hong Kong, 1.2% in China and India, 1.1% in Taiwan, 0.7% in New Zealand, and 0.4% in Indonesia and Singapore. The Japanese Nikkei rose only 0.3% despite a significant upward revision of second-quarter GDP growth in that economy. Equities in Europe, by contrast, have advanced in today’s session so far […] More

Foreign Exchange Insights and Next Week

Dollar since the Bankruptcy of Lehman Bros.

September 9, 2018

The singular event in the transformation of the financial crisis of 2007 into the Great Recession occurred ten years ago this week when U.S. Treasury and Fed officials let Lehman Brothers fail rather than fashion an aid package as they had done previously that year for other institutions. Compared to its closing levels on September […] More

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