Central Bank Watch
Bank of Israel Keeps Benchmark Interest Rate at 0.25%
October 27, 2014
A dozen interest rate reductions were implemented by the Israeli Monetary Policy Committee between September 2011 and August 2014 including three this year. According to a statement explaining today’s decision, “the effects of the recent interest rate reductions, which brought the interest rate to a level of 0.25 percent, have not yet been fully reflected […] More
New Overnight Developments Abroad - Daily Update
Muted Market Reaction to European Bank Stress Test Results
October 27, 2014
The stress test results were officially announced Sunday but largely leaked on Friday and hence did not carry an element of surprise. Moreover, no German, French or Spanish banks were listed, and about three-fourths of the collective extra capital needed to be raised by banks has been done. The dollar is unchanged against the euro, […] More
Foreign Exchange Insights and Next Week
Next Week
October 24, 2014
Central bank policy meetings are scheduled in the United States, Japan, Sweden, New Zealand, Russia, Brazil, Colombia, Mexico, Hungary and Israel. The Bank of Japan publishes its quarterly outlook on economic activity and prices on Friday, and the FOMC meeting is not one of those to be followed by a press conference. European clocks are […] More
Deeper Analysis
A Third of a Century of U.S. Disinflation
October 24, 2014
After accelerating from 7.0% per annum during the three years to end-1978 to 11.0% during the three years to end-1981, core consumer price inflation slowed to 4.7% per year between end-1981 and end-1984, 4.1% in 1985-87, 4.7% in 1988-90, 3.6% in 1991-3, 2.8% in 1994-96, 2.2% in 1997-1999, 2.4% in 2000-02, 1.8% in 2003-05, 2.3% […] More
New Overnight Developments Abroad - Daily Update
Ebolamania
October 24, 2014
On an otherwise quiet Friday from a data release standpoint, investors will be monitoring any news regarding the confirmed case of Ebola in New York City. Other areas of interest are Sunday’s ECB report on how banks did on the latest stress test and next week’s FOMC meeting. No press conference is scheduled after the […] More
Central Bank Watch
Turkish Central Bank Defies Government Pressure to Cut Interest Rates Further
October 23, 2014
Turkey’s Monetary Policy Committee kept its one-week repo (8.25%), overnight lending rate (11.25%) and overnight borrowing rate (7.5%) unchanged for a second straight monthly meeting, releasing a statement that affirmed again that “the tight monetary policy stance will be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation […] More
Central Bank Watch
Bangko Sentral ng Pilipinas: No Further Tightening in the Philippines for Now
October 23, 2014
In a statement released after the latest Filipino central bank policy meeting, the decision not to raise interest rates was justified by a somewhat better inflation outlook. Latest forecasts show a lower inflation path for 2014-2016, reflecting easing pressures on commodity prices. Inflation expectations have also remained broadly stable and aligned to the inflation target. […] More
Central Bank Watch
Norwegian Monetary Policy Remains on Pause
October 23, 2014
The interest rate cuts by the Executive Board of Norges Bank of 50 basis points in December 2011 and 25 bps in March 2012 returned the benchmark to 1.5%, its lowest level since October-November of 2009 and just 25 basis points above the Great Recession low earlier in 2009. No changes have been made at […] More
New Overnight Developments Abroad - Daily Update
Little Growth and Even Less Inflation
October 23, 2014
As on Wednesday, data released today have accentuated subdued growth and disinflation. The kiwi fell 1% against the U.S. dollar, which otherwise shows no change against the loonie, Australian dollar or yuan, downticks of 0.2% relative to the euro and Swiss franc, and rises of 0.3% vis-a-vis the yen and 0.2% against sterling. Share prices […] More
Foreign Exchange Insights and Next Week
Financial Trick or Treat
October 22, 2014
The ‘Trick or Treat’ greeting of Halloween revelers offers a choice of extremes. The handover of a holiday sweet is a happy moment for giver and receiver alike, while the contrary exchange of an act of vandalism for getting no candy leaves all parties dissatisfied. There’s no middle ground, and so it has been for […] More
