New Overnight Developments Abroad - Daily Update
Spotlight on Japan
September 19, 2012
The Bank of Japan expanded quantitative stimulus but did not exceed market expectations. The actions taken by the Policy Board of the BOJ depressed the yen to as low as 79.23 per dollar, but its net overnight drop was just 0.3% against the dollar. The greenback also rose 0.3% against the euro, 0.2% relative to […] More
Central Bank Watch
Bank of Japan Eases
September 19, 2012
The BOJ Policy Board met for six hours and 35 minutes over two days and then released a statement unveiling several changes in its stance that were agreed by a unanimous 9-0 vote of committee members. The size of the Asset Purchase Program (APP) was increased for the third time this year, this time by […] More
Deeper Analysis
Financing the U.S. Current Account Deficit — Part II
September 18, 2012
A second table below focuses on the eight components of direct investment and portfolio investment. Changes in each component between 1Q12 and 2Q12 are noted in the right-most column, where a positively signed change indicates an increased net inflow, a reduced net outflow, or a swing from a net outflow to a net inflow. The […] More
Deeper Analysis
Financing the Second-Quarter U.S. Current Account Deficit – Part I
September 18, 2012
The current account deficit contracted 12% and to 3.0% of GDP from 3.5% of GDP in the first quarter. Five-sixths of the deficit was covered by official capital inflows. Direct and portfolio investment inflows, long-term capital inflows that represent the topmost quality of dollar support in fact generated a net outflow for a third straight […] More
Central Bank Watch
Bank of Japan Preview
September 18, 2012
The Bank of Japan Policy Board is meeting Tuesday and Wednesday of this week to decide whether more stimulus should be undertaken. Market players and government officials will be beyond disappointment if no action is taken. The central bank has scant scope to support its economy with interest rate tools. The overnight money rate target […] More
Central Bank Watch
Monetary Policy Tweaked by the Central Bank of the Republic of Turkey
September 18, 2012
Monetary officials cut the overnight lending rate to 10.0% from 11.5%, while keeping the overnight borrowing rate unchanged at 5.0%. A statement from officials declares that “narrowing the interest rate corridor would support financial stability,” then adding that “if deemed necessary, a measured step in the same direction may be taken in the forthcoming period.” […] More
Central Bank Watch
Sri Lankan Monetary Policy Left Unchanged
September 18, 2012
The Monetary Board at the Central Bank of Sri Lanka left its repo and reverse repo rates at 7.75% and 9.75%, respectively. Rate hikes of 50 basis points last February and another 25 bps in April have indeed produced the desired result of cooling down the excessive growth of money and credit, and a statement […] More
New Overnight Developments Abroad - Daily Update
European Stocks and the Euro Suffer Setback
September 18, 2012
Share prices in Europe are having their worst session in two weeks. Such have so far slumped by 2.3% in Italy, 1.8% in Spain, 1.3% in France, 1.1% in Germany, and 0.9% in Britain. The euro declined 0.4% against the dollar, which otherwise is unchanged against the Swiss franc, sterling, kiwi and yuan. Another relative weak […] More
Central Bank Watch
Reserve Bank of India: Balancing Priorities
September 17, 2012
After a mid-quarter policy review, monetary officials in India cut the RBI’s cash reserve requirement to 4.75% from 5.0% but left its key 8.0% repo rate for borrowing and 7% reverse repo rate for deposit-taking unchanged. A statement released by the central bank predicts greater “pressures on liquidity over the next few weeks,” notes moves […] More
New Overnight Developments Abroad - Daily Update
Quiet Monday, Steady Dollar
September 17, 2012
The dollar is unchanged on net from Friday closing levels against the yen, loonie, Swiss franc and kiwi. The greenback has risen 0.2% against the Aussie dollar and 0.1% versus the yuan and euro, but it is 0.1% softer relative to sterling. Chinese equities slumped 2.5% on concern over limited scope for monetary policy to […] More
