Foreign Exchange Insights and Next Week
Next Week
February 13, 2016
Monday Holidays: U.S. Presidents Day and Family Day in the Canadian provinces of Alberta, Ontario and Saskatchewan. Central Bank Events: Interest rate policy meetings in Indonesia, South Korea, and Colombia. Released policy meeting minutes for the Fed, European Central Bank and Reserve Bank of Australia. At least four top officials of the Federal Reserve — […] More
Larry's Blog
Assessing Bernie Sanders
February 12, 2016
International financial markets are nervous about the prospects of either a Trump or Cruz presidency on the right, but one can find much about the Sanders phenomenon that is also worrisome. His much bigger-than-expected victory in New Hampshire demonstrates that at minimum his candidacy presents a serious challenge to Clinton. Here’s what to like about […] More
Central Bank Watch
Central Bank of Chile
February 12, 2016
Chilean monetary policy has been tightening lately as in neighboring Peru to its north, but officials have been acting less aggressively. In contrast to Peru’s four 25-basis point moves since September including a hike announced yesterday, officials at the Central Bank of Chile have tightened just twice, also by 25 basis points each in October […] More
Central Bank Watch
Central Reserve Bank of Peru
February 12, 2016
Peru’s monetary policy rate was raised 25 basis points for a third straight month and by such an amount for the fourth time since September. It now stands at 4.25%. Inflation accelerated to 4.6% in January (versus a target of 1-3%) from 4.4% in December and 4.2% in November. But that’s not why monetary officials […] More
New Overnight Developments Abroad - Daily Update
A Market Respite… But for How Long?
February 12, 2016
Share prices in Europe have recovered part of yesterday’s declines, rising so far this Friday by 2.6% in Italy, 1.7% in Greece and Great Britain, 1.5% in Germany, 1.3% in Switzerland, 1.2% in France and 1.0% in Spain. Markets in the Pacific Basin faired worse. Stocks dropped 1.5% in Hong Kong, 1.3% in Indonesia, 1.2% […] More
Central Bank Watch
Sweden’s Negative Central Bank Interest Rate Becomes Even More So
February 11, 2016
The Riksbank experience with monetary policy normalization after the Great Recession preceded the Fed’s current attempt by over five years and serves as a lesson of what can go wrong. From a low of 0.25% at the beginning of 2010, the Swedish repo rate was lifted by a full percentage point that year and by […] More
Central Bank Watch
Bangko Sentral ng Pilipinas
February 11, 2016
Filipino monetary policy settings were not changed at the latest Board meeting. Interest rates, currently at 4.0% on overnight borrowings from the central bank and 6% on overnight loans, were not changed in either 2015 or 2013, but there were four cuts in 2012 and two hikes of 25 basis points each in July and […] More
New Overnight Developments Abroad - Daily Update
Markets Experiencing Most Panic of 2016
February 11, 2016
Ten-year sovereign debt yields fell overnight by 16 basis points in the U.K. and 4 bps in Germany. The futures indication for the 10-year U.S. Treasury is an 11-basis point yield decline to 1.56%. Gold recorded its greatest daily leap in a year. It’s up 3.3% on balance at $1,236.27 per troy ounce. West Texas […] More
Central Bank Watch
Central Bank of Iceland
February 10, 2016
Iceland’s Monetary Policy Committee previously raised its seven-day collateralized lending rate from 5.25% to 5.75% in June 2015, to 6.25% in August 2015, and to the current level of 6.5% this past November. Monetary policy has been tightening in Iceland even as other central banks in Europe like the ECB adopted looser stances. This contrast […] More
New Overnight Developments Abroad - Daily Update
Hope Ahead of Yellen Testimony
February 10, 2016
U.S. stock futures are higher. Fed Chair Janet Yellen begins her semi-annual Humphrey Hawkins testimony at 15:00 GMT before the House Financial Services Committee. Many Asian markets remained closed for the Chinese New Year. The Japanese Nikkei dropped another 2.3%, and equities fell by 1.6% in Singapore, 1.2% in Australia, 1.1% in India, 0.9% in […] More
