New Overnight Developments Abroad - Daily Update
More Weak Data Creating New Doubts about Future Monetary Policy
August 14, 2014
The dollar is unchanged today against the yen, sterling and yuan. It has eased 0.5% against the kiwi, 0.3% relative to the Swiss franc, 0.2% vis-a-vis the euro and loonie and 0.1% against the Australian dollar. The ten-year Treasury yield has slipped below 2.40%, a drop of three basis points to 2.39%. The ten-year British […] More
New Overnight Developments Abroad - Daily Update
Several Instances of Weak Data Released Today
August 13, 2014
Japanese real GDP fell 6.8% annualized in the second quarter. The decline reversed the first-quarter gain but was not quite as much as analysts had feared. Because of a 20.5% dive in imports, net exports enhanced the growth rate by 4.4 percentage points, and involuntary inventory building accounted for another 3.9 percentage points of growth. […] More
Deeper Analysis
Sales Tax Hike Causes Greatest Japanese GDP Contraction Since Sendai Earthquake
August 12, 2014
A 6.8% crash in real GDP last quarter reversed a 6.1% annualized jump in the first quarter of 2014, leaving the level of GDP this spring 0.1% less than in 2Q13 and just 1.1% above its level in the second quarter of 2012. Household spending, business spending, imports and residential construction were hammered by the […] More
New Overnight Developments Abroad - Daily Update
Weak German and New Zealand Data and Confusion about Ukraine
August 12, 2014
The dollar advanced 0.3% against the euro and Swiss franc, buoyed by ZEW Institute data that revealed an 18.5-point plunge in investor expectations toward Germany to a reading of 8.6 in August, which is down from 61.7 last January, the lowest score since end-2012, and 18 points below the long-term average. The German ZEW index […] More
New Overnight Developments Abroad - Daily Update
Quiet Monday in August
August 11, 2014
The dollar is unchanged against the yen, sterling and kiwi, up 0.2% versus the euro and 0.1% relative to the Swiss franc and Australian dollar, but down 0.1% against the loonie. Geopolitical worries have been somewhat alleviated by the ceasefire in Gaza and Russian troop pull-back from the border with Ukraine. Iraq remains a confusing […] More
Foreign Exchange Insights and Next Week
Next Week
August 10, 2014
Central bank policy meetings are scheduled in the coming week in South Korea, Indonesia and Chile. The Bank of England will be publishing its quarterly Inflation Report. The ECB releases its monthly Bulletin. The Bank of Japan publishes its monthly economic assessment and minutes of a prior meeting. N.Y. Fed President Dudley and Boston Fed […] More
Central Bank Watch
Bank of Japan Keeps Status Quo
August 10, 2014
The Bank of Japan Board met last Thursday and Friday for a total of five hours 22 minutes and released a statement that retained policy settings. Since early April 2014, the interest rate has been confined to 0-0.1% and the BOJ has been buying long-term assets, mostly JGBs, to grow the monetary base by JPY […] More
New Overnight Developments Abroad - Daily Update
Geopolitical Clouds
August 8, 2014
Geopolitical worries have depressed long-term interest to an amazing extent. The 10-year Treasury yield of 2.38% is down four basis points, and the 30-year is at a 14-month low. British gilts and Japanese JGB yields slid another 2 basis points each, and the German bund is down a basis point. Japan’s Nikkei plunged 3%, most […] More
Central Bank Watch
European Central Bank Offers Nothing New this Time
August 7, 2014
Draghi’s written statement, released after the Governing Council’s decision to leave its refinancing, marginal lending and deposit rates at 0.15%, 0.40% and negative 0.10%, reads very similarly to the July statement. Officials continue to project “moderate and uneven recovery, with low rates of inflation and subdued monetary and credit dynamics.” Expected inflation hasn’t moved and […] More
Central Bank Watch
Bank of England Releases Boiler Plate Policy Statement to Say Settings Left Unchanged
August 7, 2014
The monthly Monetary Policy Committee review of policy resulted in the expected decision not to change the 0.5% Bank Rate of the GBP 375 billion ceiling associated with the quantitative asset purchase program. That limit was reached by early November 2012. The released statement said minutes would be published August 20 and noted that the […] More
