Archive for May 2014

Central Bank Watch

Central Bank of the Republic of Colombia Lifts Key Interest Rate for a Second Time

May 31, 2014

April’s first Colombian central bank interest rate hike in 26 months has been followed by a second 25-basis point increase in May, taking the key rate to 3.75%.  Before these back-to-back increases, the previous rate hike had occurred in February 2012, a move that culminated a streak of nine tightenings totaling 225 basis points.  In […] More

Deeper Analysis

May in Figures

May 31, 2014

Stock markets in May took a more optimistic view of growth prospects than did bond investors, making May the unusual month in which both asset classes improved.  Short-term interest rates remained anchored at very low levels.  The euro lost strength on speculation that the ECB will ease policy significantly in June.  From a monthly high […] More

Foreign Exchange Insights and Next Week

Next Week

May 30, 2014

Central bank policy meetings are planned next week at the European Central Bank, Bank of England, Reserve Bank of Australia, Bank of Korea, Reserve Bank of India, Bank of Mexico, National Bank of Romania, Bank of Canada, and National Bank of Poland.  The Fed’s Beige Book of regional trends will be published, and Evans and […] More

New Overnight Developments Abroad - Daily Update

Another Month Going into the Books

May 30, 2014

There have been several Japanese data releases on this final business day in May. Industrial production sank 2.5% in April, trimming the 12-month increase to 4.1% from 7.4% in March.  Officials project an increase of 1.7% in May followed by a 2.1% slump in June, and they reclassified the assessment of industrial production to “appears […] More

Central Bank Watch

Central Bank of Brazil

May 29, 2014

As widely expected, Brazil’s monetary policy committee, Copom, paused its tightening streak.  After nine straight previous meetings spanning the year between April 2013 and April 2, 2014, the Selic interest rate had been raised each time and by a total of 375 basis points from a record low of 7.25% to 11.0%.  This month, there […] More

Deeper Analysis

Comment on U.S. GDP Revision

May 29, 2014

Here’s what I take away from the 1.1 percentage point downward revision in first-quarter real economic growth to -1.0% at an annualized rate. Number one, although this is only the second negative quarter in the last nineteen quarters that comprise the current business upswing.  Looked at that way, it’s an infrequent but not unusual or […] More

New Overnight Developments Abroad - Daily Update

Between Japanese Retail Sales and U.S. GDP this Ascension Day

May 29, 2014

A number of European markets were closed today in observance of Ascension Day. The first post-tax retail sales data in Japan were reported.  Month-on-month (13.7%) and on-year declines (4.4%) were greater than forecast and the largest setbacks in three years.  Large-store sales dived 6.8% between April 2013 and April 2014, as department store sales and […] More

Foreign Exchange Insights and Next Week

A Huge ECB Meeting Looms Ahead

May 28, 2014

From a euro high of $1.3993 on May 8 when the ECB Governing Council met this week to a low today of $1.3589, the euro has depreciated 2.9%, equivalent to a 3.0% recovery of the dollar against the common European currency.  Never mind that ECB officials for years have preached to markets that they never […] More

New Overnight Developments Abroad - Daily Update

Firmer Stocks, Dollar and Yen

May 28, 2014

Share prices have risen 1.0% in China and South Korea, 0.7% in New Zealnad and Taiwan, 0.6% in Hong Kong, 0.4% in Indonesia, and 0.3% in Australia.  In Europe, equities so far are up 0.8% in Italy, 0.3% in Spain, and 0.1% in Paris, London, Frankfurt and Zurich. The dollar is 0.1% softer against the […] More

Deeper Analysis

Decent Batch of U.S. Data Released This Tuesday

May 27, 2014

Although in line with street expectations, the Conference Board gauge of May consumer confidence printed 1.3 points higher than in April, at the highest point in over a year, and indeed at the second best level since 2008.  The average level in April-May of 82.4 follows period averages of 80.0 in the first quarter and […] More

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