Central Bank Watch
Bank of Canada Identifies Two-Sided Interest Rate Policy Risk
January 22, 2014
For the first time since the last overnight interest rate policy change — a 25-basis point hike to 1.0% in September 2010 — Bank of Canada officials allowed for the possibility that the next change could be a cut. The subtle warning is contained in the final sentence of today’s rate announcement: “The timing and […] More
Central Bank Watch
Bank of Thailand Leaves Policy Unchanged Defying Speculation of a an Ease
January 22, 2014
Following a policy meeting today, Thailand’s Monetary Policy Committee voted narrowly (4-3 with three wanting a 25-basis point interest rate cut) to retain a 2.25% central bank rate. Analysts were expecting a rate cut because of soft economic growth, and a statement released by the MPC indeed acknowledges the softening of domestic demand and slower-than-forecast […] More
Central Bank Watch
Bank of Japan Very Comfortable with the Current Degree of Accommodation
January 22, 2014
It came as no surprise that the BOJ Board left all policy settings unchanged. The monetary base is being increased at a rate of 60-70 trillion yen a year. The overnight uncollateralized money rate is to stay pinned between 0.0 and 0.1%; such has lately averaged 0.07%. Stimulus is aggressively loose both quantitatively and qualitatively. […] More
New Overnight Developments Abroad - Daily Update
Focus on Central Banks
January 22, 2014
Bank of Japan Board members went out of their way to dissuade markets from counting on additional monetary policy stimulus soon. The January meeting left 9-1/2-month-old policy settings intact, reaffirmed the prior meeting’s economic assessment, and released new price and growth forecasts that are very similar to those adopted in October. Governor Kuroda said the […] More
Central Bank Watch
Magyar Nemzeti Bank Reduces Incremental Monthly Interest Rate Cut
January 21, 2014
A cut in Hungary’s central bank base rate has been implemented for the 18th straight month. The first dozen starting in August 2012 were by 25 basis points each from a starting level of 7.0%. The next five reductions totaled 20 basis points apiece, cutting the level from 4.0% to 3.0% after the December 17th […] More
Central Bank Watch
Central Bank of the Republic of Turkey
January 21, 2014
Monetary officials again left the one-week repo rate at 4.5%, the overnight lending rate at 7.75%, and the overnight borrowing rate at 3.5%. The most recent changes in these interest rates were a 50-basis point cut in the repo rate and overnight borrowing rate last May and hikes of 75 basis points last July followed […] More
New Overnight Developments Abroad - Daily Update
Dollar Strengthening as 3-Day U.S. Holiday Weekend Ends
January 21, 2014
U.S. markets will reopen following the MLK holiday, but activity will continue to be dampened by a big storm in the Northeast. The dollar gained overnight by 0.7% against the kiwi, 0.5% relative to the yen, loonie and Swiss franc, and 0.3% versus the euro and Australian dollar. The Canadian dollar weakened through the 1.1000 […] More
New Overnight Developments Abroad - Daily Update
Chinese Data Released on a U.S. Holiday
January 20, 2014
The U.S. Martin Luther King JR. holiday has sucked leadership out of today’s market action. The dollar shows only small changes from Friday’s closing, losing 0.3% against the euro and Aussie dollar, 0.2% relative to the yen, and 0.1% versus the Swiss franc and sterling. The loonie, kiwi and yuan are unchanged. Share prices in […] More
Foreign Exchange Insights and Next Week
Next Week
January 17, 2014
Central banks in Canada, Japan, the Philippines, Thailand, Turkey and Hungary are scheduled to hold interest rate-deciding meetings next week. The Bank of Canada releases a quarterly Monetary Policy Report, and the Bank of England will be publishing minutes from its policy meeting held earlier this month. The Bank of Japan’s monthly economic assessment arrives. […] More
Central Bank Watch
Central Bank of Chile Holds Interest Rate Steady
January 17, 2014
There was no rate reduction this time for a second straight monthly meeting, but a statement from Bank officials retains a policy bias toward easing: The Board estimates that in the coming months it might be necessary to increase the monetary stimulus to ensure that projected inflation will stand at 3% in the policy horizon. On-year […] More
