Central Bank Watch
Virtual Zero Interest Rate Policy Continuing in Czech Republic
December 19, 2012
Officials in the Czech National Bank voted unanimously to leave the two-week repo rate at 0.05%. Such was cut 20 basis points on November 1, 25 bps on September 27, and 25 bps on June 28. Previously, the key central bank was lowered from a pre-Great Recession high of 3.75% to 1.0% by end-2009 and […] More
Central Bank Watch
Unchanged Monetary Stance in Taiwan
December 19, 2012
The Central Bank of the Republic of China’s Board reviews monetary policy on a quarterly basis and has kept a 1.875% discount rate since a 12.5 basis point hike to that level in June 2011. That was the fifth consecutive such increase from a 16-month-long trough of 1.25%. In the Great Recession, the discount rate […] More
New Overnight Developments Abroad - Daily Update
Confidence Continuing to Build into the New Year
December 19, 2012
An optimistic mood surrounds the fiscal cliff talks. The German IFO business climate index rose to a 5-month high in December despite a softer reading on current conditions. Peripheral sovereign debt yields slipped further in the euro area. S&P removed the “Selective Default” designation on Greek debt. Japan’s Nikkei soared 2.4%, its best single session […] More
Central Bank Watch
Another Hungarian Central Bank Interest Rate Cut
December 18, 2012
Officials at the Magyar Nemzeti Bank cut the 2-week bill rate by 25 basis points for the fifth straight month. The first of these moves in August to 6.75% was the first rate reduction since April 2010. The rate level now becomes 5.75%, still 50 basis points above the Great recession trough. A background statement […] More
Central Bank Watch
First Cut of Turkey’s One-Week Repo Rate since August 2011
December 18, 2012
Turkey monetary officials continue to face conflicting imperatives. Growth last quarter (up just 1.6% from 3Q11) was its weakest since 2009, and CPI inflation has dipped under 6.5%. However, a current account deficit is shrinking only gradually and at some 6.5% of GDP remains greater than desired. An assortment of tools are employed to balance […] More
Central Bank Watch
Swedish Monetary Policy Eased but Officials Expect No Changes Next Year
December 18, 2012
A 25-basis point cut in the Riksbank repo rate to 1.0% announced this morning was accompanied by rate guidance that 1.0% is likely to be both the average and endyear rate level in 2013. Risks around that level are balanced. Today’s action had been anticipated and followed earlier 25-basis point cuts in December 2011 and […] More
Deeper Analysis
How the U.S. Current Account Deficit was Funded Last Quarter
December 18, 2012
The U.S. current account deficit dropped $10.6 billion in the third quarter. Although the decline was a bit less than analyst forecasts, it represented a 0.3 percentage point (ppt) reduction from the second quarter and a drop of 0.8 ppts from the first quarter of 2012. All financing for the current account gap in 3Q […] More
Central Bank Watch
Reserve Bank of India Appears to Pre-Announce Easier Stance Next Quarter
December 18, 2012
The Reserve Bank of India did not cut its 4.25% cash reserve requirement (CRR) as widely expected after its review of monetary policy. Indian growth slowed below 6% this year, and inflation has moved lower recently. The CRR had been reduced by 25 basis points each in September and October and, before that, by 50 […] More
New Overnight Developments Abroad - Daily Update
Investors Heartened by Reported Progress on Fiscal Cliff Talks
December 18, 2012
Share prices rose overnight by 1.0% in Japan, 0.6% in India, 0.5% in Australia, 0.3% in New Zealand and Thailand, 0.2% in Taiwan and the Philippines, and 0.1% in China. In Europe, equities have advanced 0.7% in Madrid, 0.4% in Frankfurt and Milan, and 0.3% in London, but the Paris Cac is off 0.1%. Not […] More
Deeper Analysis
Japanese Economy During Shinzo Abe’s Term as First Prime Minister
December 17, 2012
Abe’s first stint as Japan’s prime minister lasted exactly one year and ended on September 27th. His reputation back then was much as it remains now. He’s a foreign policy hawk. In 2006-7, he practiced toughness in dealings with North Korea and other Asian neighbors and denied atrocities committed by Japan during and before the […] More