Archive for July 2015

Foreign Exchange Insights and Next Week

Next Week

July 31, 2015

Central Banking Beat:  Interest rate policy meetings at the Bank of England, Bank of Japan, Czech National Bank, Reserve Bank of Australia, Reserve Bank of India, Bank of Thailand, and Romanian National Bank.  The Bank of England’s quarterly Inflation Report arrives, and Bank of Japan Governor Kuroda holds a press conference.  Holiday Closure:  Canadian August […] More

Central Bank Watch

Another Step Made in the Unwinding of Last Year’s Russian Monetary Tightening

July 31, 2015

Russia is grappling with a bad case of stagflation that combines a deepening recession with inflation that’s above 15% and still cresting.  The ruble’s vulnerability magnifies the central bank’s difficult task balancing these two extremes.  The emphasis in 2014 was on fighting inflation, but in 2015 officials have switched the stress back to growth.  In […] More

Central Bank Watch

Bank of Mexico

July 31, 2015

Mexico’s main central bank interest rate has been kept at 3.0% after another policy meeting.  Such was cut from 8.25% to 4.25% in the first seven months of 2009 and the rest of the way to the current level between March 2013 and June 2014.  Inflation has fallen to a 45-year low somewhat below the […] More

New Overnight Developments Abroad - Daily Update

Monthend Finds Dollar and Stocks Mixed and Commodities Lower

July 31, 2015

With July drawing to an end, the dollar rose overnight by 0.8% against the kiwi, 0.5% versus the Aussie dollar, 0.,2% relative to the loonie and 0.1% against the yen and sterling.  But the dollar also fell 0.7% against the Swiss franc and 0.4% vis-a-vis the euro.  The yuan is steady. The Shanghai Composite index […] More

Deeper Analysis

Comment on U.S. GDP

July 30, 2015

The U.S. economy rebounded in the spring from a weather depressed first quarter.  At 2.3%, the annualized growth of real GDP was very close to market expectations, four times faster than the first-quarter pace, but hardly better than what’s come to be the economy’s average performance.  The six-year-long post-Great Recession upswing has produced an average […] More

New Overnight Developments Abroad - Daily Update

Lots of Data and Another Drop in China’s Stockmarket

July 30, 2015

The dollar rose overnight by 1.0% against the kiwi, 0.4% versus the yen, Swissie and Australian dollar, and 0.2% relative to the loonie, euro and sterling.  The yuan continues to be held steady, but Chinese stocks slumped 2-3%. in other Pacific Basin markets, equities dropped 1.1% in Singapore, 0.9% in South Korea and 0.6% in […] More

Central Bank Watch

Central Bank of Brazil Tightens Monetary Policy Again in Face of Accelerating Inflation and Contracting GDP

July 29, 2015

Copom, Brazil’s monetary policy committee, started raising its short-term Selic interest rate from a base of 7.25% in April 2013.  Inflation then of 6.6% was above target and threatening to send inflation expectations upward.  Over the ensuing year to April 2014, the Selic rate was increased by 3.75% to 11%, and policy tightening was put […] More

Deeper Analysis

FOMC Policy Statement a Very Close Facsimile of the Prior One

July 29, 2015

Officials made even fewer modifications in the wording than the scant amount I was expecting, and the only changes came in the first paragraph describing economic conditions.  The labor market — both job growth and unemployment — were upgraded, but the overall assessment of moderately expanding activity, sub-target inflation, low market-based measures of inflation compensation, […] More

Central Bank Watch

FOMC Preview

July 29, 2015

The last FOMC meeting on June 16-17 upgraded growth on improved household consumption, spoke of continuing progress on the mandates to maximize employment and secure a 2.0% inflation target, but decided that more evidence of sustained growth and higher inflation are needed before beginning to normalize the federal funds rate.  Energy and the dollar, two […] More

New Overnight Developments Abroad - Daily Update

Dollar Marking Time Ahead of Today’s FOMC Announcement

July 29, 2015

The FOMC policy statement will be released at 18:00 GMT (14:00 EDT).  There is no press conference or release of updated forecasts.  No policy change is expected, but investors are unsure if the statement will provide clarifying information regarding the likelihood of a rate hike at September’s meeting.  I look for vagueness on that regard, […] More

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