Central Bank Watch
Central Bank of Hungary
May 27, 2014
Monetary officials engineered a 22nd straight monthly cut of their benchmark interest rate, a 10 basis point reduction as was expected. This was the third 10-bp cut, following two 15-bp reductions, 5 straight 20-bp cuts and a dozen 25-bps cuts. Prior to August 2012, the key interest rate was at 7.0%, and now it is […] More
New Overnight Developments Abroad - Daily Update
Little Change in the Dollar Ahead of U.S. Data
May 27, 2014
The dollar was narrowly mixed overnight, with gains of 0.2% against the yuan and 0.1% relative to the kiwi, Swissie and sterling, no change versus the yen and euro and dips of 0.2% vis-a-vis the Australia and dollar and 0.1% relative to the Canadian dollar. There is a busy U.S. data release calendar this Tuesday, […] More
Central Bank Watch
Surprise Decision by Bank of Israel Not to Cut Lending Rate an 11th Time Just Yet
May 26, 2014
Israel’s central bank rate will stay at 0.75% for the time being. It was cut by 50 bps in 2011, 100 bps in 2012, 75 bps in 2013 and, most recently, to 0.75% from 1.0% this past February. All the prior reductions had been by 25 basis points, and lower than expected CPI inflation and […] More
New Overnight Developments Abroad - Daily Update
Holiday Closures in U.K. and United States
May 26, 2014
The United States is observing Memorial Day, and there is a spring bank holiday in Britain. These closures will dampen market activity today. The dollar is unchanged against the euro, Swiss franc and kiwi, up 0.1% versus the Chinese yuan and off 0.1% relative to the yen, loonie, Australian dollar and sterling. Share prices advanced […] More
Foreign Exchange Insights and Next Week
Next Week
May 23, 2014
Global markets will be watching this weekend’s Ukraine election and EU parliamentary election results. U.S. and British markets are closed Monday for Memorial Day and a spring bank holiday, respectively, while a number of continental European countries are observing Ascension Day on Thursday. Central bank interest rate decisions will be announced in Brazil, Hungary, New […] More
New Overnight Developments Abroad - Daily Update
Softer Euro
May 23, 2014
Germany’s IFO Institute reported an unexpected drop in its proprietary German business climate index to a five-month low, claiming that “a lull was seen in the German economy in May.” The overall index fell to 110.4 from 111.2 in April. Current conditions dropped 0.5 points, while expectations fell back 1.1 points. Manufacturing, construction, wholesaling and […] More
Central Bank Watch
South African Monetary Policy Left Unchanged With Tightening Bias
May 22, 2014
The committee continues to hold the view that we are in a rising interest rate cycle, and interest rates will have to be normalized in due course. We embarked on this process with our first move in January 2014. At this stage the pace and timing of normalisation in the advanced economies appears to have […] More
Central Bank Watch
Turkish One-Week Repo Rate Cut to 9.5% from 10.0%
May 22, 2014
Citing lower market interest rates, less uncertainty in general, and improved risk premium indicators, officials at the Central Bank of the Republic of Turkey reduced the hey repo interest rate, which had been previously at 10.0% since a 550-basis point increase in mid-January. The overnight lending and borrowing rates were left unchanged at 12% and […] More
New Overnight Developments Abroad - Daily Update
Several Preliminary Purchasing Manager Surveys Support Cautious Optimism
May 22, 2014
Late Wednesday, investors were heartened by the dovish tone of the FOMC minutes. News that China’s HSBC-compiled purchasing managers index for manufacturing had risen 1.6 points to a 5-month high of 49.7 provided another upbeat impulse to the mood. In other PMI news, Japan’s factory PMI rose 0.5 points to a 2-month high of 49.9. […] More
Foreign Exchange Insights and Next Week
One Way or Another
May 21, 2014
The euro zone economy is in desperate need of a weaker exchange rate. No surer remedy exists for halting regional disinflation in a timely enough fashion and for ensuring against sliding long-term inflation expectations amid actual inflation that is substantially below target. The euro’s level is not an impediment to engineered depreciation. It’s birth value […] More
