New Overnight Developments Abroad - Daily Update

Dollar Slips and Stocks Rise Ahead of Last FOMC Decision of the Yellen Era

December 13, 2017

The dollar fell overnight by 0.7% against the kiwi, 0.6% versus the Aussie dollar, 0.4% relative to sterling, 0.3% vis-a-vis the yen and 0.1% against the euro, Swiss franc and loonie. Core U.S. CPI inflation in November was 0.1 percentage point less than forecast with a rise of 0.1% from October and a 1.7% 12-month […] Read Article

Foreign Exchange Insights and Next Week

Updating a Note Posted in December 2015 on Yearend Seasonality of EUR/USD

December 13, 2017

In the early years after the United States adopted flexible dollar exchange rates in March 1973, the U.S. currency an astonishingly consistent pattern of depreciation against the mark during the second half of each December, dropping in thirteen out of fourteen years in one stretch. Like the euro now, theĀ  mark was then Europe’s predominant […] Read Article

Central Bank Watch

FOMC Statement and Forecasts

December 13, 2017

The FOMC met market expectations in raising the federal funds rate by an as-expected 25 basis points to 1.25-1.50%. But the vote was 7-2, with Chicago Fed President Evans joining Minneapolis Fed President Kashkari in favoring no change in the rate. A fairly upbeat statement observes that unemployment (now 4.1%) has declined further and that […] Read Article

Deeper Analysis

Euroland’s PMI Advantages Versus the U.S. Extended in November

December 5, 2017

Whereas the U.S. non-manufacturing purchasing managers index fell 2.7 points to a 3-month low of 57.4 in November, Euroland’s service-sector PMI rose to a six-month high of 56.2. The resulting 1.2-point spread between the two data series was 3.9 points less U.S.-advantageous than in October and the narrowest differential since August. Adding this differential to […] Read Article

Central Bank Watch

Central Bank of Iceland

December 13, 2017

Iceland’s Monetary Policy Committee had implemented cuts of its seven-day term interest rate of 50 basis points in August 2016 and of 25 basis points each earlier this year in May, June and October. The collective decline of 125 basis points exactly reversed hikes during 2015, leaving the level at 4.25%. The statement released today […] More

Central Bank Watch

FOMC Preview

December 13, 2017

The Fed announcement and new macroeconomic forecast will be announced at 19:00 GMT (14:00 EST) today. Previous forecasts were published in September. The federal funds rate will almost surely get raised by 25 basis points to 1.25-1.50%, marking the fourth such move since the meeting held a year ago. Chair Yellen will preside over her […] More

New Overnight Developments Abroad - Daily Update

Eye on The Fed, Alabama, and Some Data Releases

December 12, 2017

The Federal Open Market Committee begins a 2-day policy review that almost surely will lead to the third interest rate hike of 2017. The first two moves were enacted in March and June. This will be the final FOMC meeting presided over by Janet Yellen. A press conference is scheduled tomorrow, and new forecasts will […] More

New Overnight Developments Abroad - Daily Update

Markets React Calmly to Terrorist Explosion in NYC

December 11, 2017

A bomb carried by Bangladeshi suicide bomber seems to have exploded prematurely at the New York Port Authority bus terminal at around 07:30 am this morning, producing only 3 minor injuries other than to the Terrorist assailant. Compared to Friday closing levels, the dollar is down 1.2% versus the kiwi, 0.6% relative to the yen, […] More

Foreign Exchange Insights and Next Week

Next Week

December 8, 2017

Central Banks: The Fed, ECB and Bank of England lead a long list of central banks holding their final monetary policy reviews of 2017. Other countries on the list are Switzerland, Russia, Norway, Iceland, Indonesia, Ukraine, Mexico, Peru, Chile, Turkey and Colombia. Yellen of the Fed, Kuroda of the Bank of Japan, Draghi of the […] More

New Overnight Developments Abroad - Daily Update

Strong U.S., Japanese, Chinese, French and Canadian Data Reported and Brexit Talks Take a Step Forward

December 8, 2017

There have been some impressive stock market advances overnight in Asia (Japan 1.4%, Hong Kong 1.7%, Singapore 1.1%, and India 0.9) and Europe (Italy 1.3%, Germany 0.9%, Spain 0.8% and the U.K. 0.7%). The S&P is 0.4% firmer in early U.S. trading. The dollar is closing out the week on a high note, having risen […] More

Central Bank Watch

National Bank of Serbia

December 7, 2017

Serbia’s central bank executive board decided not to change its key policy rate which has been at 3.5% for the past two months. Such had been cut 275 basis points in the final eight months of 2013, 150 bps in 2014, 350 bps in 2015 and 50 basis points in 2016. This year’s only change […] More

New Overnight Developments Abroad - Daily Update

A Scramble to Tie Up Loose Ends

December 7, 2017

Politicians around the world are in a rush to complete unfinished business. Republicans in the U.S. House and Senate are negotiating a compromise of their separate bills to get a law signed before the Christmas recess. The process is proceeding informally and without Democratic Party involvement to compress the timetable. A risk continues that the […] More

Central Bank Watch

Central Bank of Brazil

December 6, 2017

The Selic rate was reduced to 7.0% from 7.5%. The size of the decline, the smallest of eight in 2017, did not surprise analysts. The rate is 625 basis points lower than at end-2016 and down 10.5 percentage points since mid-2014. Today’s decision was voted unanimously and without bias by Copom, the policy committee, and […] More

Central Bank Watch

Canadian Overnight Interest Rate Target Left at 1.0%

December 6, 2017

A statement released after the final scheduled Bank of Canada Governing Council meeting of 2017 observes that growth has evolved since the prior meeting along expected lines but also concedes that inflation has been a bit greater than expected and projects firmer core inflation over time. Slack is getting absorbed, but the growth of potential […] More

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