Deeper Analysis
In June, U.S. and Eurozone PMI Trends Converged Somewhat
July 5, 2012
June purchasing manager survey results reflect a dramatic narrowing of the U.S. economy’s advantage over Euroland. The factory PMI spread fell 2.0 points to a 6-month low of 5.0, while the non-manufacturing PMI differential dropped 3.8 points to 4.6. The sum of these spreads, a gauge of U.S. superiority depicted in the right-most column plunged […] More
Central Bank Watch
ECB Review
July 5, 2012
As expected, the ECB reduced interest rates today. Not only were the refinancing rate and marginal lending rate cut respectively to a new record lows of 0.75% from 1.0% and 1.5% from 1.75%, but the Governing Council also took the once distained step of slashing the deposit rate to zero from 0.25%. The Bank of […] More
Central Bank Watch
Monetary Easing in China Injects Element of Surprise to a Day Focused Already on Central Banking
July 5, 2012
The People’s Bank of China cut its one-year lending rate to 6.0% from 6.31% and its one-year deposit rate to 3.0% from 3.25%. This is a follow-up easing to respective cuts of 25 basis points to each of those rates implemented on June 7, as well as three 50-basis point reductions of reserve requirements since […] More
Central Bank Watch
No Change in Malaysian Monetary Policy
July 5, 2012
Between March 2010 and May 2011, four 25-basis point increases of Bank Malaysia Negara’s overnight target rate were implemented, but no further policy changes have been undertaken in the ensuing seven meetings of the Monetary Policy Committee. That includes today’s gathering after which officials announced that the key rate stays at 3.0%. A statement from […] More
Central Bank Watch
More Quantitative Easing from Bank of England
July 5, 2012
The Bank of England’s Asset Purchase Program has been increased by another GBP 50 billion. The new ceiling becomes GBP 375 billion. The previous increase in the program’s size was announced in February. However, whereas that prior increment was met within three months, this new easing will take four months at a pace of GBP […] More
New Overnight Developments Abroad - Daily Update
Awaiting ECB and Bank of England Decisions Plus U.S. Data
July 5, 2012
Investors have high expectations that the ECB will cut interest rates and that the Bank of England will also ease policy. Scheduled U.S. data today include the ADP estimate of private sector jobs, the Labor Department weekly report of jobless insurance claims, weekly oil inventories, and the ISM non-manufacturing purchasing managers survey for June. The […] More