Central Bank Watch
Unchanged Swiss Monetary Policy after Quarterly Review
June 19, 2014
Almost three years have passed since the current policy stance was established to ward off deflation. On August 3, 2011, the Swiss National Bank sliced the target 3-month Libor interest rate range and point to 0.0-0.25% and “around zero,” respectively. A month later, officials introduced an asymmetric exchange rate objective, capping Swiss franc strength against […] More
Central Bank Watch
Central Bank of Norway Keeps 1.5% Benchmark Interest Rate and Releases Dovish Statement
June 19, 2014
Norges Bank’s policy rate has been at 1.5% since a 25-basis point cut in March 2012, which followed a 50-bp cut in November 2011. The current level is only 25 basis points above the mid-2009 low. A statement from the central bank Executive Board observes that other countries are likely to take longer to raise […] More
New Overnight Developments Abroad - Daily Update
Firmer Dollar and European Share Prices
June 19, 2014
Investors perceived a dovish message in Janet Yellen’s press conference yesterday. The Swiss and Norwegian central bank statements fortified that risk on mood. Share prices have climbed 1.6% in Japan and Australia, 1.1% in Italy, 0.9% in Spain and France, and 0.8% in Britain and Germany. China’s market fell another 1.5%, however. The dollar has […] More
Central Bank Watch
A Few Takeaways from Today’s Federal Reserve Actions
June 18, 2014
The formal FOMC statement revealed almost nothing really useful. Most of the text was repeated language, and the modifications were unsurprising. The economic assessment of rebounding activity and a further improvement of the labor market were predictable. So was the decision to scale back asset buying by another $10 billion per month. Nobody dissented, the […] More
Deeper Analysis
Comment on U.S. Current Account Release
June 18, 2014
Although the deficit of $111.156 billion last quarter was 27.3% wider than the 14-year low recorded in the final quarter of 2013 and greater than analysts were anticipating, the shortfall’s size relative to nominal GDP of 2.6% was consistent with results since 2009. That ratio had fallen to 2.0% in 4Q13 but averaged marginally less […] More
Central Bank Watch
Central Bank of Sri Lanka: No Rate Change
June 18, 2014
Between December 2012 and October 2013, Sri Lankan monetary authorities implemented three cuts in their key lending and deposit rates totaling 125 basis points. In January of this year, there was a further 50-basis point reduction of the lending rate, which with an unchanged deposit rate narrowed the reverse repo of 8.0% versus repo rate […] More
Central Bank Watch
Bank of Thailand Didn’t Cut Policy Interest Rate Further
June 18, 2014
Five 25-basis point reductions had been authorized between November 2012 and March 2014, but the previous meeting on April 23 voted 6-1 for keeping the 2.0% policy rate, with a single dissent in favor of a sixth cut. Today’s decision not to change policy drew a unanimous vote and was accompanied by a statement that […] More
New Overnight Developments Abroad - Daily Update
Spotlight on Several Central Banks
June 18, 2014
Currency markets have been generally quiet ahead of the Federal Reserve policy decision. A further measured scale-back of quantitative easing is expected but not a change in the federal funds target. A statement and newly released macroeconomic forecasts arrive at 14:00 EDT (18:00 GMT) followed by Janet Yellen’s press conference at 14:30 EDT. Ironically, Chairwoman […] More
Deeper Analysis
FOMC Preview
June 17, 2014
In the seven weeks since the last FOMC meeting at end-April, geopolitical tension have lifted the price of West Texas Intermediate crude oil by 7.4%. The dollar has appreciated 2.4% against the euro but is essentially flat relative to the yen. On balance, 10-year Treasuries and the Dow Jones Industrials likewise hardly changed on net. […] More
New Overnight Developments Abroad - Daily Update
RBA Minutes Depress Australian Dollar in Otherwise Quiet Morning
June 17, 2014
The Australian dollar declined 0.4% against its U.S. counterpart. Minutes from the central bank’s June 3 meeting contained a more sober view of economic growth prospects, satisfaction that inflation will stay in target, and the continuing assertion that Australia’s exchange rate is stronger than warranted. The U.S. currency otherwise is is uchanged against the euro, […] More
