Central Bank Watch
Bank Indonesia Keeps 6.5% Benchmark Rate
November 4, 2009
The rate decision matched the decisions made in the prior two months and had been expected. But comments from BI officials appeared aimed to dissuade speculation about a rate hike next year. CPI inflation had ticked up a tenth in September, and officials had previously been warning that inflation is likely to move up to [...] More
Central Bank Watch
Bank of England Preview
November 4, 2009
For the ECB, the key meetings fall in March, June, September and December because new staff forecasts are announced at those times. For identical reasons, the key Bank of England meetings tend to be those in February, May, August and November. Thursday’s announcement from the Monetary Policy Committee needs to address the issue of whether [...] More
Central Bank Watch
ECB Preview
November 4, 2009
At 12:45 GMT on Thursday, the ECB is expected to announce no change in its 1.0% refinancing rate, which has been at that level since May. Investors would also be surprised to see the disappearance of recent buzz words depicting a continuing ultra accommodative stance. Policy is appropriate. Although the economy is stabilizing, the recovery [...] More
Currency Markets in the News
PMI Spread in Services Favors Euroland Over United States
November 4, 2009
PMIs U.S. Ezone U.S. Ezone Sum of Services Services Spread Mf’g Mf’g Spread Spreads Feb 2008 49.7 52.3 -2.6 48.8 52.3 -3.5 -6.1 March 49.9 51.6 -1.7 49.0 52.0 -3.0 -4.7 April 51.9 52.0 -0.1 48.6 50.7 -2.1 -2.2 May 51.2 50.6 +0.6 49.3 50.6 -1.3 -0.7 June 48.8 49.1 -0.3 49.5 49.2 +0.3 0.0 July 49.6 48.3 +1.3 49.5 47.4 +2.1 +3.4 August 50.4 48.5 +1.9 49.3 47.6 +2.1 +4.0 Sept 50.0 48.4 1.6 43.4 45.0 -1.6 0.0 October 44.6 45.8 -1.2 38.7 41.1 -2.4 -3.6 November 37.4 42.5 -5.1 36.6 35.6 +1.0 -4.1 December 40.1 42.1 -2.0 32.9 33.9 -1.0 -3.0 Jan 2009 42.9 42.2 +0.7 35.6 34.4 +1.2 +1.9 Feb 41.6 39.2 +2.4 35.8 33.5 +2.3 +4.7 March 40.8 40.9 -0.1 36.3 33.9 +2.4 +2.3 April 43.7 43.8 -0.1 40.1 36.8 +3.3 +3.2 May 44.0 44.8 -0.8 42.8 40.7 +2.1 +1.3 June 47.0 44.7 +2.3 44.8 42.6 +2.2 +4.5 July 46.4 45.7 +0.7 48.9 46.3 +2.6 +3.3 August 48.4 49.9 -1.5 52.9 48.2 +4.7 +3.2 Sept 50.9 50.9 0.0 52.6 49.3 +3.3 +3.3 October 50.6 52.6 -2.0 55.7 50.7 +5.0 +3.0 October saw the U.S. and euro area record purchasing manager indices with readings above 50 in both manufacturing and non-manufacturing. That means that activity is expanding on both cylinders in each economy. The table above derives first differences between the U.S. and Euroland. Whereas the spread in manufacturing is getting more [...] More
Central Bank Watch
Vital Market Prices at Time of Prior FOMC Announcements
November 4, 2009
EUR/$ $/JPY 10Y, % DJIA Oil, $ 06/30/04 1.2173 109.44 4.63 10396 37.95 06/30/05 1.2090 110.89 3.96 10370 57.00 06/29/06 1.2527 116.07 5.20 11077 73.41 06/28/07 1.3452 123.17 5.10 13456 69.82 08/07/07 1.3749 118.55 4.73 13510 72.27 09/18/07 1.3888 115.75 4.51 13475 81.42 10/31/07 1.4458 115.28 4.42 13873 93.59 12/11/07 1.4682 111.49 4.11 13645 89.78 01/30/08 1.4792 107.31 3.70 12454 91.70 03/18/08 1.5786 98.73 3.41 12257 107.53 04/30/08 1.5562 104.58 3.83 12953 111.54 06/25/08 1.5568 108.37 4.18 11837 133.62 08/05/08 1.5445 108.42 3.97 11484 119.82 09/16/08 1.4144 105.16 3.36 10936 91.18 10/08/08 1.3625 99.87 3.50 9447 87.02 10/29/08 1.2933 97.15 3.81 9145 67.38 12/16/08 1.3790 90.14 2.52 8687 44.14 01/28/09 1.3253 90.01 2.61 8356 42.92 03/18/09 1.3115 98.13 2.94 7340 47.73 04/29/09 1.3331 97.06 3.02 8194 51.05 06/24/09 1.3984 95.43 3.59 8373 68.76 08/12/09 1.4221 96.17 3.71 9366 70.64 09/23/09 1.4779 91.50 3.50 9859 69.13 11/04/09 1.4830 90.71 3.51 9913 80.17 The dollar, Treasury yields, and equities are extraordinarily close to where such were six weeks ago when the previous FOMC statement was released. In contrast, oil prices have advanced 16.1% and stand 87% above their level when the FOMC held its first meeting of 2009 back in January. No possibility exists of the [...] More
New Overnight Developments Abroad - Daily Update
New Overnight Developments Abroad: Awaiting Central Bank Roll Call and ADP Report
November 4, 2009
Expectations of a dovish FOMC statement have buoyed stocks and commodities but depressed the dollar and yen. Bank of England and ECB decisions are tomorrow. There’s interest too in today’s ADP report on private U.S. employment in October. Analysts expect much better jobs data than in September. The dollar has fallen 1.2% against the Australian dollar, [...] More
