New Overnight Developments Abroad - Daily Update

Turkey and Iran in the News

June 24, 2019

The Turkish ruling party’s candidate was soundly defeated in Istanbul’s re-run mayoral election. This blow to President Erdogen’s autocratic regime sent the Turkish lira up 0.8% against the dollar. Iranian authorities are claiming that U.S. cyber attack against Iran’s rocket launch system were unsuccessful. Fears of a U.S.-Iran war persist. The price of WTI crude […] Read Article

Foreign Exchange Insights and Next Week

Next Week

June 21, 2019

Central Banks: Monetary policy reviews in New Zealand, Iceland, Mexico, Thailand, Hungary and the Czech Republic. Bank of Japan publishes minutes from its April meeting and a summary of this month’s meeting. Federal Reserve officials speaking publicly include Chairman Powell, Bullard (who dissented at this week’s FOMC meeting), Bostic and Harker. Bullard and Lowe of […] Read Article

Central Bank Watch

Bank of Norway Tightens

June 20, 2019

The last of today’s bonanza of central bank policy announcement was the exception to the dovish predisposition of other monetary authorities. The Bank of Norway as expected raised its policy interest rate by 25 basis points to 1.25%. This was the third tightening move following 25-bp increases last September and March but leaves the rate […] Read Article

Deeper Analysis

Dollar-Supporting U.S. Balance of Payments

June 21, 2019

The seasonally adjusted U.S. current account deficit was $13.5 billion smaller in the first quarter than in the final quarter of 2018, and it narrowed 0.3 percentage points as a percent of GDP to 2.5%. That ratio, which this century crested at 6.3% in the final quarter of 2005, hasn’t averaged 3.0% or higher in […] Read Article

New Overnight Developments Abroad - Daily Update

Dollar Trims its Thursday Losses

June 21, 2019

Today’s session illustrates America’s challenge sustaining a depreciating trend the dollar, which recovered overnight by 0.4% against the kiwi and sterling, 0.3% relative to the peso, 0.2% versus the yuan and Australian dollar and 0.1% vis-a-vis the yen and Swiss franc. But the dollar managed to lose another 0.2% against the euro and 0.1% versus […] More

Foreign Exchange Insights and Next Week

Can the U.S. Win a Currency War?

June 20, 2019

President Trump wants a weaker dollar to depress imports, strengthen U.S. exports and import-competing domestic goods, and wean America off its reliance on globalized supply lines. He believes the dollar is fundamentally overvalued, and there is some merit to that claim. The most recent semi-annual update of the Economist’s BIG MAC index done last January […] More

Central Bank Watch

Bank of England Bracing for Possible No-Deal Brexit

June 20, 2019

The Bank of England left the British Bank Rate at 0.75%, its level since a 25-basis point hike last August. The baseline forecast, which was formally reviewed at the prior meeting, anticipates further rate normalization, but assumed a smooth Brexit process that looks increasingly unlikely. Today’s statement identifies increased downside growth risks, projects flat GDP […] More

Central Bank Watch

Japanese Monetary Policy Not Changed

June 20, 2019

Following its scheduled monetary policy review, the Bank of Japan left its stance unchanged but observed weak industrial production, export demand, housing, and expected inflation. Amid escalating global uncertainties and ahead of a planned domestic sales tax hike, BOJ officials flagged a rising possibility of more easing in the future, but the credibility of that […] More

New Overnight Developments Abroad - Daily Update

Dollar Down on a Perfect Storm of Tensions Fraught with Uncertainty

June 20, 2019

The dollar lost 0.6-0.9% overnight against the euro, Swiss franc, loonie, yuan, kiwi, Australian dollar and Mexican peso. The greenback also has fallen 0.4% relative to the yen and 0.3% vis-a-vis sterling. The list of unknowns keeps lengthening. Iran shot down a U.S. surveillance drone, seemingly bringing another Middle East war closer. From Fed Chairman […] More

Central Bank Watch

FOMC Statement and Projections

June 19, 2019

Today’s FOMC Statement downgraded the pace of economic activity to moderate but left the labor market assessment at strong. Personal consumption “appears to have picked up,” but business investment is still “soft.” As expected, forward guidance was modified, acknowledging increased uncertainties and replacing a stress on being patient with a promise to “act as appropriate […] More

Central Bank Watch

FOMC Preview

June 19, 2019

After meeting last time seven weeks ago, the Federal Open Market Committee upgraded its assessment of economic growth, called the U.S. labor market strong, maintained the federal funds target range at 2.25-2.50%, and also kept the buzzword “patient” in describing its predisposition toward future adjustments of the policy stance. In rhetoric from Chairman Powell and […] More

New Overnight Developments Abroad - Daily Update

Much Riding on Fed Chairman’s Press Conference

June 19, 2019

The dollar is unchanged from Tuesday closing levels against the yen, yuan, kiwi, and Australian dollar. The greenback has slipped 0.4% against the Swiss franc, 0.3% relative to sterling but just just 0.1% vis-a-vis the loonie and euro. U.S. President opened a fresh topic in the 24-hour news cycle, accusing ECB President Draghi and that […] More

New Overnight Developments Abroad - Daily Update

Confidence Rising that Central Banks Will Counter Deteriorating Global Economic Outlook

June 18, 2019

Today could have been an ugly day in world financial markets. The Japanese Nikkei lost 0.6% overnight. Ten-year sovereign debt yields show big declines of 17 basis points in Italy, 10 bps in France and Spain, 7 bps in the United States and Germany, and six bps in the U.K.. The German ZEW Institute’s June […] More

New Overnight Developments Abroad - Daily Update

A Quiet Uneventful Monday So Far

June 17, 2019

The third week of June is getting off to a slow start in world financial markets. Trade tensions between the United States remain high amid uncertainty over whether Trump and Xi meet at the G20 meeting later in the month. Investors are also paying close attention to central bank activities, as the Fed, Bank of […] More

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