Archive for April 2015

Deeper Analysis

April in Figures

April 30, 2015

There was a huge rebound in West Texas Intermediate oil prices during April, but the level at end-month was still way below where such was trading last June.  Comex gold and short-term interest rates were little changed, in contrast.  The dollar posted across-the-board losses in the month.  After today’s sharp losses, U.S. stocks were only […] More

Central Bank Watch

Bank of Mexico Keeps 3.0% Overnight Lending Rate

April 30, 2015

From a peak of 8.25%, Mexico’s key interest rate earlier had been cut by 375 basis points during the first seven months of 2009 and by another 150 bps between March 2013 and June 2014.  There haven’t been any changes since mid-2014, and a statement released after today’s policy meeting defends the current stance because […] More

Larry's Blog

U.S. Real Growth and Technology

April 30, 2015

The span of time since Y2K constitutes a “long run,” and it has seen a proliferation of new electronic devices transforming the world as we know it.  U.S. inventions have driven much of this technology revolution, yet U.S. real economic growth has counter-intuitively slowed greatly.  It’s not that America’s best and brightest have done a […] More

Central Bank Watch

Bank of Russia Cuts Key Interest Rate by Greater-than-Forecast 150 Basis Points

April 30, 2015

Following up on reductions of 200 basis points on January 30 and 100 bps announced March 13, the Central Bank of Russia’s key repo rate was slashed today to 12.5% from 14.0%.  This brings the drop to 450 basis points and trims last year’s cumulative tightening of 11.5 percentage points by 39%.  A statement was […] More

Central Bank Watch

Bank of Japan Left Monetary Policy Stance Unchanged and Released New Forecasts

April 30, 2015

The end-April single-day four hour board meeting released two statements.  The first release merely reaffirmed the parameters of its quantitative and qualitative stimulus, which has goals of a) expanding both the monetary base and BoJ holdings of Japanese government bonds by 80 trillion yen per year (about $670 billion) and b) lengthening the average maturity […] More

New Overnight Developments Abroad - Daily Update

Cornucopia of Data and Central Bank Announcements as April Draws to an End

April 30, 2015

Japan’s Nikkei slumped 2.7% following yesterday’s very weak U.S. GDP followed by an FOMC statement that kept the possibility of a June rate hike alive.  Share prices also fell in Hong Kong, China, Taiwan, South Korea, India, and Indonesia.  In Europe, where Moody’s cut Greece’s credit rating further, equities are narrowly mixed. The dollar advanced […] More

Central Bank Watch

Central Bank of Brazil

April 29, 2015

As expected, the policymaking committee unanimously agreed to another hike of the Selic interest rate, this time to 13.25% from 12.75%.  It has cumulatively been increased by 150 basis points in 2015, 550 bps since April 2013, and 600 bps since the current tightening cycle began in the spring of 2013.  Brazil’s inflation rate, now […] More

Central Bank Watch

Reserve Bank of New Zealand Keeps Official Cash Rate at 3.5%

April 29, 2015

The OCR has been at 3.5% since a 25-basis point hike last July, but the policy bias is toward easing as attested by this passage from the latest policy statement: The Bank expects to keep monetary policy stimulatory, and is not currently considering any increase in interest rates. We are watching closely the ongoing impact […] More

Central Bank Watch

FOMC Statement

April 29, 2015

Today’s statement  does not constrain monetary officials at the Federal Reserve from doing whatever they believe is most appropriate at subsequent meeings on June 17, July 29 and September 17.  The opening paragraph, always devoted to a rundown of economic conditions since the last policy meeting includes a number of downgrades, acknowledging the slower pace […] More

Deeper Analysis

Remarks on the Weak 1Q U.S. GDP Data

April 29, 2015

Real GDP expanded just 0.2% last quarter, and nominal GDP edged up by a smaller 0.1% at an annualized rate.  Both results were below consensus. Weak first quarters have become an habitual occurrence, which makes sense unless you happen to still believe that talk of climate change is a myth.  Seven of the last nine […] More

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