Archive for June 2015

New Overnight Developments Abroad - Daily Update

IFO Monthly Report and a Setback in the Greek Talks

June 24, 2015

Yesterday’s proposal by Greek Prime Minister Tsipras was not accepted by all the Europeans.  News of this setback sent share prices down 3.8% in Greece and 0.9% in Germany, Spain and Italy.  Stocks fell also by 0.5% in France and Switzerland and by 0.1% in Great Britain.  The Greek fixed asset yield spread above Germany […] More

Central Bank Watch

Magyar Nemzeti Bank Does Another Rate Cut of 15 Basis Points to Record Low of 1.50%

June 23, 2015

In the two year through July 2014, Hungary’s central bank policy rate fell 490 basis points to 2.10%.  After an 8-month hiatus, easing resumed this past March.  The key rate including today’s cut has fallen by 15 basis points after the last four consecutive monthly meetings of Hungary’s Monetary Council.  A statement today signals that […] More

Central Bank Watch

Central Bank of the Republic of Turkey

June 23, 2015

Turkish monetary policy remains restrictive despite several rate cuts most recently in February when the one-week repo rate and overnight borrowing rate were sliced 25 basis points to 7.5% and 7.25%, respectively, while the overnight lending rate was cut 50 bps to 10.75%.  In early 2014, those rates stood at 10.0%, 8.0%, and 12.0%.  Monetary […] More

New Overnight Developments Abroad - Daily Update

Spreading Hope over Greece Lifts Equities

June 23, 2015

Negotiators claim to have reached an agreement on the main principles regarding a Greek debt accord and express hope that a full deal can be worked out this week. Share prices are up 3.9% in Greece, 1.0% in Germany, 1.2% in France, 0.9% in Spain and Italy, 1.1% in Switzerland but just 0.1% in Britain. […] More

Central Bank Watch

Bank of Israel Keeps its Key Interest Rate at 0.10%

June 22, 2015

The June meeting of the Monetary Policy Committee in Israel ended with a decision not to ease the ultra-accommodative stance any further, and market indications of rate expectations have sliced the probability of more easing according to a statement released by the Bank of Israel.  The rate had been cut by 75 basis points each […] More

New Overnight Developments Abroad - Daily Update

Greece Offers New Proposal to Creditors

June 22, 2015

The dollar, European stocks and European bond yields are higher.  Greek P.M. Tsipras offered a new deal, which wasn’t outright rejected initially, to the heads of the IMF, EU and ECB.  EMU finance ministers meet later today in Brussels.  The offer has engendered new optimism that a default and Grexit can be avoided. Share prices […] More

Foreign Exchange Insights and Next Week

Next Week

June 19, 2015

Central Banks:  Interest rate policy meetings next week are being held in Turkey, Hungary, the Czech Republic, Israel and The Philippines.  Minutes will be published from the May meeting of the Bank of Japan’s Policy Board.  Powell and George are among the Fed officials speaking publicly. Greece:  To use two cliches, the drop-dead date in […] More

Central Bank Watch

Bank of Japan Recommends a More Transparent Policy Framework

June 19, 2015

The June BOJ Policy Board meeting produced no significant modifications from the previous statement.  Quantitative stimulus was last tweaked in October 2014.  The new statement after five hours 21 minutes of discussion over two days was a virtual replica of May’s and therefore dull.  The baseline forecast assumes a return to 2% core inflation in […] More

New Overnight Developments Abroad - Daily Update

China Steals Greece’s Thunder in the Market Spotlight

June 19, 2015

For whatever reason, markets are not taking the Greek debt standoff as seriously as one might expect.  Neither the Tsipras government nor Greece’s creditors have taken steps that suggest a last minute compromise.  But share prices in Europe are up 1.1% in Italy, 0.7% in Spain and 0.6% in Greece.  Several markets in the Pacific […] More

Deeper Analysis

Comments on U.S. Current Account, Consumer Prices, and Monetary Policy

June 18, 2015

Balance of payments data out today confirm a weakening that foreshadows the dollar’s correction downward since mid-March.  The $113.3 billion current account deficit in the first quarter was $10.2 billion wider than the prior quarter’s imbalance.  The deficit increased as well in each of the final two quarters of 2014, bringing the three-quarter cumulative deterioration […] More

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