Archive for December 2009

Central Bank Watch

Polish and Taiwanese Central Bank Rates Left Steady

December 24, 2009

The Narodowy Bank retained a 3.5% reference interest rate as expected.  Officials expect consumer price inflation to hover near the 2.5% target even though the latest prints of 3.3% on the total CPI and 2.8% on core lie above such.  A new discount rate facility2 on bills of exchange is being introduced at the start of […] More

New Overnight Developments Abroad - Daily Update

Somewhat Less Pressure on Greek Debt

December 22, 2009

The dollar was narrowly mixed overnight, easing 0.4% against the Canadian dollar and 0.1% versus the euro but advancing by 0.3% against sterling and the Australian dollar, 0.2% against the yen and Swiss franc, and 0.1% relative to the kiwi. Stocks are mostly higher, with the notable exception of China.  Equities have risen 1.9% in […] More

Deeper Analysis

Bond Yields in the Noughties Compared to the Nineties

December 21, 2009

As the current decade winds down, the ten-year minus two-year yield curve has lengthened to a record width and is up 136 basis points since the end of 2008.  Nonetheless, the ten-year yield of 3.67% remains 78 basis points below its decade average of 4.45%.  Likewise, that average for the present decade of the noughties […] More

Central Bank Watch

Hungary’s Policy Interest Rate Reduced Less Than Expected

December 21, 2009

The Magyar Nemzeti Bank cut its policy rate by 25 basis points, not 50 bps as forecast, and released a statement that did not attribute the smaller move to higher on-year inflation of 5.2% in November after 4.7% in October but rather to market perceptions of fiscal risk and the forint’s associated vulnerability.  The rise […] More

New Overnight Developments Abroad - Daily Update

Quiet Start to Pre-Xmas Week

December 21, 2009

Trading volume has been restrained by snow storm in Eastern U.S. and approaching yearend holidays.  Federal snow day in D.C.  European weather also severe. The dollar is unchanged against the euro and Swiss franc.  The Swissy remains stronger than 1.50 per euro (latest quote = 1.4955) despite released Swiss National Bank quarterly report that reiterates […] More

Videos

Interview Discussing Policies of the Swiss National Bank and Bank of Japan

December 18, 2009

Click here for my interview with ForexTV discussing the franc’s appreciation though 1.50 per euro, what the Swiss National Bank might do in response, and the Bank of Japan’s declaration of war against deflation. More

Central Bank Watch

Central Banks in Colombia and Philippines Leave Key Rates Unchanged

December 18, 2009

The Bank of the Republic of Colombia kept a 3.5% benchmark interest rate.  Amid falling inflation and a recession that’s now over, the rate was slashed from a peak of 10% by 50 basis points in December 2008, 50 bps in January, 100 bps in each of the next four consecutive months, 50 bps in […] More

Foreign Exchange Insights and Next Week

Next Week

December 18, 2009

Japanese markets close next Wednesday for the Emperor’s Birthday holiday.  Many Continental European centers will shut either for all or part of Thursday.  Japan will be one of very few open markets on Christmas Day, and is making the most of the opportunity, as that day will see the release of consumer prices, labor statistics, […] More

Foreign Exchange Insights and Next Week

Weekly Foreign Exchange Insights: Shifting Themes as Yearend Beckons

December 18, 2009

The dollar experienced a third straight well-bid week, shrugging off a seasonal tendency in many previous years to swoon in late December.  The U.S. currency had weakened during the bulk of 2009, posting peak-to-trough declines of 20.7% against sterling, 17.7% against the euro and 17.1% relative to the Swiss franc.  The depreciation had been characterized […] More

Central Bank Watch

Bank of Japan Review

December 18, 2009

Following five hours and 35 minutes of deliberations over two days in its final meeting of 2009, the Bank of Japan Policy Board decided unanimously to leave its target for uncollateralized overnight money at a rate of 0.1% and retained the prior assessments that 1) economic activity is “picking up” and likely to improve at […] More

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