Central Bank Watch
Bank of Japan Halloween Surprise
October 31, 2014
Most analysts including myself didn’t expect a policy change, and the package of stimulus enhancements announced by the BOJ Board was approved by only a 5-4 majority, albeit one that included Governor Kuroda and his two Deputies. This was the first modification of quantitative and qualitative easing (QQE)launched some 19 months ago. The changes look […] More
Central Bank Watch
Bank of Mexico Keeps 3.0% Overnight Rate
October 31, 2014
Taking into account the above, the Governing Council has decidedto keep in 3 percent goal forthe interbank interest rate overnight, which estimated that the monetary stance is consistent with the efficient convergence of inflation to the target of 3 percent. Forward, it will remain attentive to the performance of all the determinants of inflation andexpectations […] More
New Overnight Developments Abroad - Daily Update
Significant Monetary Policy Changes in Japan and Russia
October 31, 2014
Quantitative and qualitative monetary stimulus was expanded sharply in Japan by a 5-4 vote, with the central bank governor and two deputy governors siding with the majority. The impact of the decision to boost annual JGB buying from 50 trillion yen to 80 trillion yen, triple holdings of ETFs and J-REITS, and lengthen the average […] More
New Overnight Developments Abroad - Daily Update
The Reaction to the Fed Statement
October 30, 2014
The FOMC communique was more hawkish than expected. Weak growth in Europe and enhanced global market volatility since the prior policy meeting did not deter monetary officials from ending the third phase of quantitative easing and declaring that U.S. deflationary risks had diminished. There was also a shift in direction of dissenting votes on the […] More
Central Bank Watch
Reserve Bank of New Zealand Continues 3.5% Official Cash Rate
October 29, 2014
Four 25-basis point interest rate hikes were implemented this year at meetings in March, April, June and July, but this month’s meeting like that in September kept policy on hold. Indeed, the kiwi remains too high, CPI inflation is still only modest, and house price pressures have eased significantly. Lower commodity prices and increased global […] More
Central Bank Watch
FOMC Statement Review
October 29, 2014
The FOMC statement upgrades the assessment of labor market conditions, calling employment growth solid and unemployment lower, and terminates QE3. Moreover, the statement does not cite slower global growth, and it says the likelihood of inflation persistently below 2% has diminished somewhat. The language of forward interest rate guidance was not changed, however, anticipating no immediate […] More
New Overnight Developments Abroad - Daily Update
Waiting for the Fed Announcement
October 29, 2014
The dollar and yen have slipped 0.4-0.5% against the euro, Swiss franc and Aussie dollar. Japan’s Nikkei and Hong Kong’s Hang Seng closed 1.5% and 1.3% stronger. Stocks are up 0.6% in Germany and Britain. The Japanese 10-year JGB fell a basis point to 0.45%, while the German bund and British gilt marked time. Oil […] More
Central Bank Watch
Magyar Nemzeti Bank
October 28, 2014
Hungary’s benchmark interest rate was reduced at every monthly meeting over the two years between August 2012 and July 2014, falling to 2.1% from 7.0%. It is now time to retain the low interest rate for an extended time frame through at least the end of 2015. That’s the reaffirmed message of today’s statement that […] More
Central Bank Watch
A Full-Court Press to Lift Inflation in Sweden
October 28, 2014
Drastically low inflation and expected inflation call for extraordinary action. The Executive Board lopped off the last 25 basis points on its benchmark repo rate today. The interest rate had been at 2.0% prior to December 2011 but reduced a percentage point to 1.0% by end-2012. Another cut of 25 bps was administered in December […] More
New Overnight Developments Abroad - Daily Update
Some Good Economic News for a Change
October 28, 2014
Industrial profits in China reverted to positive on-year growth in September, albeit a gain of only 0.4%. A 0.6% decline in the year to August was negative for the first time in almost two years. Japanese retail sales increased 2.7% on month in September, three times more than forecast, and posted the largest on-year advance, […] More
