New Overnight Developments Abroad - Daily Update
Spanish Glue
June 26, 2012
Spain’s problems look increasingly sticky. Moody’s downgraded the rating of 28 Spanish banks, and Spanish T-bill auction results produced worse results on dampened expectations of a productive EU summit at the end of this week. The 2.36% yield on the 3-month paper sold by the government was 1.5 percentage points higher than at the May […] More
Central Bank Watch
Bank of Israel Announced Interest Rate Reduction
June 25, 2012
Israel’s policy interest rate was sliced as expected at the June monthly meeting by 25 basis points to 2.25%. Such was the fourth such decline since September 2011 and the first since January 23, 2012. From a low of 0.5% at the start of 2009, the rate was previously raised by 75 basis points each […] More
New Overnight Developments Abroad - Daily Update
Investors Worried about Europe and China
June 25, 2012
The last week of June started on a down note, with softer share prices, bond yields, European currencies and oil prices. There have been few data releases so far this Monday, but three U.S. indicators are scheduled. Press reports over the weekend claim that China’s economy has slowed more abruptly than official data imply. According […] More
Foreign Exchange Insights and Next Week
Next Week
June 22, 2012
The highlight of the coming week will be the Thursday-Friday summit of EU leaders. Central banks in Hungary, the Czech Republic, Romania and Israel hold policy meetings. This is the final week of June and the second quarter, and it is very crowded with scheduled data releases. The U.S. statistical calendar shows the Chicago Fed […] More
Foreign Exchange Insights and Next Week
Euro’s Slide as Debt Crisis Continues has been Orderly
June 22, 2012
Major matters are at stake in the euro crisis that is now nearly three years old, and most people and institutions dealing with the mess have been cast in an unflattering light. The broader world community, not just financial markets, are deeply frustrated with the European problem. So all things considered, the key EUR/USD relationship […] More
New Overnight Developments Abroad - Daily Update
Stocks Down but Currencies Steady
June 22, 2012
At the end of a Thursday that saw global equities decline sharply, Moody’s announced that it was downgrading the credit rating of 15 money center U.S. and European banks. Then today came news of a 1.6-point additional drop in the IFO index of German business confidence. Stocks in Asia and Europe have lost more ground […] More
Central Bank Watch
No Change in Taiwan’s Benchmark Interest Rate
June 21, 2012
Following a quarterly review, monetary officials in Taiwan left their key policy interest rate at 1.87%. This was the fourth rate review that resulted in no interest rate change. From June 2010 through June 2011, five straight hikes of 12.5 basis points were implemented, lifting to benchmark by a total of 62.5 basis points from […] More
Deeper Analysis
FOMC Hangover
June 21, 2012
Press coverage of yesterday’s FOMC event agrees basically with my initial impression that less action was delivered than seemed warranted by the use of more dovish rhetoric. Different explanations have been postulated to explain this disconnection. Officials suspect policy stimulus has reached a point of diminishing net bang for the buck. They suspect that more […] More
Central Bank Watch
No Changes Made in Turkish Central Bank Rates
June 21, 2012
A fourth straight monthly policy meeting at the Central Bank of the Republic of Turkey ended in agreement not to change any part of the central bank rate structure. The main policy rate, the 7-day repo, has been at 5.75% since a 50-basis point cut last August. The last change in the overnight borrowing rate, […] More
New Overnight Developments Abroad - Daily Update
Data Releases Mixed and Plentiful
June 21, 2012
The formal Declaration of G20 Leaders, who met earlier in Los Cabos, Mexico, is big on general objectives but sparse on detailed actions. The FOMC Statement accentuated the U.S. economy’s increasing softness, but the stimulus of a 6-month continuation of Operation Twist did not surpass expectations. Stocks were mostly lower overnight. New Democracy leader Samaras […] More
