Deeper Analysis
All Quiet on the North American Inflation Front
February 22, 2013
Very subdued January CPI data were reported by the United States yesterday and Canada today. U.S. consumer prices were unchanged on month for the second time in a row following a 0.2% dip in November. A 1.6% 12-month rate of increase was the lowest in a half year and down from 2.9% in the previous […] More
New Overnight Developments Abroad - Daily Update
Stronger Tone in Equities
February 22, 2013
Stocks in Europe are up 1.4% in Italy, 1.3% in Spain, 1.7% in France, 1.0% in Germany, and 0.8% in Britain. Share prices rose 0.7% in Japan, 1.1% in New Zealand, 0.8% in Australia, 0.5% in Hong Kong, 0.4% in Indonesia and 0.2% in South Korea, but China’s market fell by 0.5%. The U.S. dollar […] More
Foreign Exchange Insights and Next Week
Can’t Get There from Here
February 21, 2013
A state of considerable uncertainty always surrounds financial decisions that need to be made. In the past, there tended to be more type A uncertainty among currency market participants than now, which results when people believe they understand cause-and-effect relationships better than they in fact do and as a result under-appreciate the complexity of predicting […] More
New Overnight Developments Abroad - Daily Update
Overnight Markets Uneasy
February 21, 2013
Equities dropped 3.4% in China, 2.3% in Australia, 1.7% in Hong Kong, 1.6% in India, 1.4% in Japan, 1.2% in Thailand, and 1.0% in New Zealand. In Europe, share prices have so far slumped 2.9% in Italy, 1.9% in Germany and France, 1.8% in Spain and 1.7% in Britain. Bonds were hit in Europe. The […] More
Central Bank Watch
Bank of Thailand
February 20, 2013
Thailand’s Monetary Policy Committee decided to leave the 2.75% one-day repo rate unchanged even though it’s revising upcoming growth a bit higher and concedes that inflation is up somewhat as well because of elevated energy costs. Nevertheless, there was one dissent in favor of a 25-basis point cut in today’s 6-1 vote. The prior no-change […] More
New Overnight Developments Abroad - Daily Update
Weaker Sterling and Kiwi
February 20, 2013
Dovish gestures from the Governors of the Bank of England and Reserve Bank of New Zealand are weighing on their respective currencies. BOE Governor King, whose 10 years on that job end at mid-2013, joined the minority in a 6-3 vote not to expand quantitative easing according to minutes of the February 6-7 meeting. This […] More
Central Bank Watch
A Mixed Message from the Central Bank of the Republic of Turkey
February 19, 2013
Turkish monetary officials made a number of decisions. A 5.5% one-week repo rate, which is the main Turkish policy reference rate, was retained. A 25-basis point cut in December had been the first change since a 50-bp cut in August 2011. The overnight interest rate corridor was sliced by 25 basis points to a range […] More
New Overnight Developments Abroad - Daily Update
Stronger Yen and Aussie Dollar
February 19, 2013
The U.S. dollar has declined 0.5% against the yen and 0.4% relative to the Australian dollar. Other overnight dollar movement has been muted, with gains of 0.2% versus the loonie and 0.1% against the euro, Swissie and kiwi. The dollar is unchanged relative to the Chinese yuan and British pound. Stocks slumped 1.9% in China, […] More
New Overnight Developments Abroad - Daily Update
Yen Weaker after G20 Statement’s Release
February 18, 2013
A statement from G20 finance ministers and central bank governors did not single out Japan. Officials said competitive currency devaluations should be avoided by allowed domestic macroeconomic stimulus to promote growth and counter inflation that is too low are negative. The yen fell to overnight lows of 94.23/USD and 125.93/EUR. China has reopened after the […] More
Deeper Analysis
G20 Statement Doesn’t Call Japan a Currency Manipulator
February 16, 2013
A statement released today by Group of Twenty finance ministers and central bank chiefs reiterates general policy principles but, as discovered in earlier leaked drafts, does not sanction the behavior of specific governments, notably the Abe Cabinet in Japan. The paragraph directly dealing with proper currency management (in italics below) asserts that market-determined currency values […] More
