Archive for March 4th, 2015

Central Bank Watch

Central Bank of Brazil Tightens Credit Again

March 4, 2015

The monetary policy committee, known as Copom, raised the Selic interest rate by another 50 basis points, matching increases made on January 20 and December 3rd.  There also was a 25-basis point hike last October and 375 basis points of tightening between April 2013 and April 2014.  The new Selic rate level of 12.75% will […] More

Foreign Exchange Insights and Next Week

An Abbreviated Weekly Dollar Essay

March 4, 2015

Snow shoveling duty will limit the length of the dollar essay this week to a couple of developments worth watching. The first is explained in an earlier posting today on Currency Thoughts that documents a very sharp narrowing of the U.S. and eurozone purchasing managers indices between November 2014 and last month.  This convergence in both […] More

Deeper Analysis

U.S. and Eurozone Activity Trends Converging Surprisingly Quickly Since November

March 4, 2015

A poll of forecasters conducted each month by The Economist found expectations as recently as February of U.S. GDP growth in 2015 (3.3%) to be almost three times higher than the view toward the euro area (1.2%).  The average forecasts three months earlier were respectively 2.9% and 1.2%.  However, in the table below, which shows […] More

Central Bank Watch

No Change Made in Bank of Canada’s 0.75% Overnight Interest Rate Target

March 4, 2015

The target had been cut at the prior Governing Council Meeting on January 21, which coincided with a quarterly review of economic conditions and prospects.  The cut in January was the first rate change since a hike in September 2010 was was characterized as providing “insurance against risk of too low inflation and growth from […] More

Central Bank Watch

Narodowy Bank Eases Polish Monetary Policy

March 4, 2015

Reductions of 50 basis points in the National Bank of Poland’s reference rate to 1.5%, Lombard rate to 2.5%, and deposit rate to 0.5% were announced in a central bank statement today.  Officials make a case for deepening deflation in Poland: “Moderate wage growth, the fall in global commodity prices and no demand pressure all […] More

Central Bank Watch

Monetary Policy Tightened Sharply in Ukraine

March 4, 2015

The plunging hryvnia has lifted Ukraine inflation into double digits.  In response, officials at the National Bank of Ukraine had raised their discount rate a month ago from 14.0% to 19.5%, but that didn’t stem geopolitically-generated capital flight.  So even more draconian measures were unveiled in a statement released today.  The discount rate has been […] More

Central Bank Watch

Reserve Bank of India Cuts Rates between Scheduled Meetings

March 4, 2015

RBI Governor Rajan released a statement announcing a new monetary policy framework oriented around a single target of 4% CPI inflation give or take two percentage points.  The statement also informed markets about a 25-basis point cut of the RBI repo rate to 7.5%.  A similar cut on January 15 (also not coinciding with a […] More

New Overnight Developments Abroad - Daily Update

More PMI Surveys Reported and a Second Indian Central Bank Rate Cut

March 4, 2015

The Reserve Bank of India sliced its repo, reverse repo and standing facility rates by 25 basis points to 7.5%, 6.5%, and 8.5%.  Like the prior change on January 15, this easing of monetary policy was taken between scheduled policy reviews, creating a big element of surprise.  The latest action was taken in conjunction with […] More

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