Central Bank Watch
What Might the ECB Say on Thursday?
October 5, 2010
In September, the ECB press conference was a bit more dovish than expected, but data and verbal remarks by officials in the subsequent five weeks have led some analysts to see that shift reversed this month. The timing is not good for doing that. Other governments and central banks, including in the United States, are […] More
Central Bank Watch
Bank of England Won’t Pull QE2 Trigger Thursday
October 5, 2010
Suspense ahead of Thursday meeting of the Monetary Policy Committee concerns whether the asset purchase program might be increased as a stimulative step. Minutes from last month’s meeting indicate a greater predisposition to doing such by some members, even though Andrew Sentance retained is dissent in favor of a rate increase. Sentance has won no […] More
Central Bank Watch
Australia’s Central Bank Extends Pause in Tightening to Six Months
October 5, 2010
In leaving the Official Cash Rate at 4.5%, the Reserve Bank of Australia fooled a majority of analysts expecting an increase to 4.75%. To brace against a recession that Australia narrowly escaped, the benchmark central bank rate had been reduced previously from 7.25% prior to September 2008 to a 49-year low of 3.0% by early […] More
Central Bank Watch
Indonesian Monetary Policy Kept Steady as Expected
October 5, 2010
The Bank Rate of Bank Indonesia was left at 6.5%. This was the 14th consecutive monthly meeting to leave policy unchanged. The previous nine meetings between December 2008 and August 2009 all resulted in a reduction of the rate, the sum of which amounted to 300 basis points from a cyclical crest of 9.5%. A […] More
Deeper Analysis
Divergent Momentums in U.S. and Euro Area Service Sectors
October 5, 2010
Service sector purchasing manager indices printed less than a point apart last month in the United States (53.2) and Euroland (54.3). The scores signify moderate rates of expansion in both regions, but that’s where any similarity ends. The U.S. index advanced 1.7 points above the August reading and was 1.2 points better than forecast. The […] More
Central Bank Watch
Bank of Japan Tries to Get Ahead of the Market
October 5, 2010
Stocks rose, long-term interest rates fell, but the yen remained strong and steady following what the BOJ web site entitles a Comprehensive Monetary Easing. The Policy Board deliberated for six hours and 53 minutes over two days and voted 9-0 to ease policy in several ways. Here’s what they decided. To cut the overnight money […] More
New Overnight Developments Abroad - Daily Update
Data Deluge and Bank of Japan Returns to ZIRP
October 5, 2010
The Bank of Japan cut the interest rate target on overnight uncolateralized money to 0-0.25% but in fact virtually zero (ZIRP). An asset purchase program was also established with the intent of driving long-term interest rates lower. Officials now see a slower pace of recovery and a delayed return to a path of sustainable growth […] More
