New Overnight Developments Abroad - Daily Update

Dollar Strengthens but Stock Market Rebound Short-lived

October 17, 2018

The dollar rose overnight except against the yen, which kept pace. Assorted dollar gains amounted to 0.6% vis-a-vis sterling, 0.4% versus the euro and peso, 0.3% relative to the Swiss franc, kiwi and Aussie dollar, and 0.2% against the loonie and yuan. Except in India, whose stock market closed down 1.1%, share prices in the […] Read Article

Foreign Exchange Insights and Next Week

U.S. Current Account and The Dollar

October 9, 2018

Reducing the U.S. trade deficit is a centerpiece of President Trump’s economic policy agenda, but the imbalance has been widening in 2018. A $570.5 billion census-basis merchandise trade deficit in January – August was $50.4 billion, or almost 10%, larger than the year-earlier deficit. Bilateral deficits grew each by $21.4 billion with Europe and China. […] Read Article

Central Bank Watch

Hungarian National Bank

October 16, 2018

As expected Hungary’s central bank rates were left unchanged at the monthly policy review. The last Base Rate Change was a reduction of 15 basis points to 0.90% in May 2016, and the last change in the overnight deposit rate was a 10-basis point cut to -0.15% made in September 2017. A released statement projects […] Read Article

Deeper Analysis

Three Risks When Political Leaders Influence Monetary Policy

October 17, 2018

President Trump’s progressively blunt criticism of the Federal Reserve for a string of gradual interest rate hikes should surprise nobody. The president’s style of overturning institutions¬† has taken him very far in politics. Criticizing Fed policy, even though the Chairman and two of the other current governors are his appointees, fits a pattern that has […] Read Article

New Overnight Developments Abroad - Daily Update

U.K., China, and Saudi Arabia in the News

October 16, 2018

British regular pay inflation accelerated 0.2 percentage points to 3.1% in June-August, the highest pace since the start of 2009. This has generated speculation about another Bank of England tightening and lifted the pound 0.5% above yesterday’s closing level. Chinese consumer prices recorded their second straight monthly advance of 0.7% in September, lifting the 12-month […] More

New Overnight Developments Abroad - Daily Update

Equities Down and Bond Yields Rise Again

October 10, 2018

The dollar is comparatively steady, showing no net overnight change against the euro, yuan or sterling and upticks of 0.1% versus the Swiss franc, loonie and Australian dollar and of 0.2% relative to the Mexican peso. Somewhat bigger appreciations have occurred against the kiwi of 0.4% and yen of 0.3%. Share prices fell 1.1 in […] More

New Overnight Developments Abroad - Daily Update

Dollar and Sovereign Debt Yields Rise, while Equities Slip Further

October 9, 2018

Markets remain risk averse today. The dollar appreciated 0.4% against the euro, 0.3% versus the loonie, peso and kiwi, 0.2% relative to the Swiss franc, Aussie dollar, and sterling, and 0.1% vis-a-vis the yen. Share prices fell 1.3% in Japan, 1.0% in Australia, 0.7% in New Zealand, 0.6% in Indonesia, and 0.5% in Singapore and […] More

Central Bank Watch

Bank of Israel Leaves Central Bank Rate at 0.10% and Signals Reluctance to Start Normalization Anytime Soon

October 8, 2018

Forty four months have elapsed since the last Israeli central bank change, a cut of 15 basis points to 0.10% in February 2015. Inflation is still too low to begin raising the rate. The inflation environment has not changed markedly since the previous interest rate decision, despite slightly lower than expected recent CPI readings: The […] More

New Overnight Developments Abroad - Daily Update

More Risk Aversion Lends Support to Dollar

October 8, 2018

The dollar has risen today by 0.8% against the Chinese yuan, 0.6% relative to sterling, 0.4% versus the euro, 0.3% vis-a-vis the loonie, and 0.1% against the Swiss franc and Mexican peso. Japan (Sports Day) and Canada (Thanksgiving) are observing holiday closures, but China reopened for business following a one-week observance of the Communist Revolution […] More

Foreign Exchange Insights and Next Week

Next Week

October 5, 2018

Central Banks: Monetary policy reviews in Serbia, Peru, Israel and Argentina. Bostic, Williams and Evans are some of the Fed officials speaking publicly. ECB minutes to be published. Holidays and Special Events: Sports Day in Japan, Columbus Day in the U.S. and Thanksgiving Day in Canada fall on Monday. The Autumn World Bank/IMF meetings run […] More

New Overnight Developments Abroad - Daily Update

Awaiting U.S. Jobs Report and the Kavanaugh Vote and Watching Sino-U.S. Trade Dispute Intensify

October 5, 2018

Wednesday’s ADP estimate of private employment growth and very low jobless insurance claims suggest a very large jump in U.S. non-farm payroll jobs. The Labor Dept announces the figure at 08:30 EDT. A cloture procedural vote on the Kavanaugh debate mid-day should set the stage for a a full senate confirmation vote Saturday. Best guess […] More

Central Bank Watch

Bank of Mexico Leaves Overnight Interbank Rate at 7.75%

October 4, 2018

Mexican CPI inflation of 4.9% as of August exceeded the 3% target and even the target range ceiling of 4%. Expected inflation is also running above the comfort zone in Mexico, but growth is only around 2%. The central bank interest rate was increased by 250 basis points during 2016, 150 basis points during 2017, […] More

New Overnight Developments Abroad - Daily Update

Long-Term Interest Rates Climb Higher All Around the World

October 4, 2018

Ten-year sovereign debt yields extended their recent advance by 13 basis points in Greece, 8 bps in Great Britain, 6 bps in Italy, Germany and The Netherlands, 5 bps in France, 3 bps in U.S. Treasury futures, and 2 basis points in Japan. Fed Chairman Powell expressed strong confidence in an interview yesterday that solid […] More

Deeper Analysis

Spread Widens Between U.S. Non-Manufacturing PMI and Euroland’s Services PMI

October 3, 2018

The ISM-compiled U.S. non-manufacturing purchasing managers index rose 3.1 points in September to 61.6, which is a record high for this 10-year-old data series. Sub-indices for business activity/production and for jobs climbed by 4.5 points and 5.7 points, while those for prices and new business were 1.4 and 1.2 points above their August readings. The […] More

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