Archive for April 2016

Deeper Analysis

April 2016 in Figures

April 30, 2016

The dominant market themes in March had been strong oil and equities, dollar and yen weakness, and modest sovereign debt yield increases.  In April, West Texas Intermediate crude oil extended March’s 13.6% advance with a further leap of 19.8%, but yen strength was the big currency market story.  Ten-year sovereign debt yields rose except for […] More

Foreign Exchange Insights and Next Week

Next Week

April 29, 2016

Purchasing managers surveys, holiday closures and U.S. labor statistics will dominate the first week of May. PMIs:  A slew of them will be released, covering manufacturing, service sectors, construction and retail trade activity.  Multiple reports will be released every day of the week. Central Banks:  Monetary policy meetings in Australia, Mexico, the Czech Republic and […] More

Central Bank Watch

Key Russian Central Bank Rate Kept at 11.0%

April 29, 2016

The Central Bank of Russia’s Board of Directors projects a drop of CPI inflation from 7.3% currently to 5% a year from now and the 4.0% target by end-2017.  But officials want to be more confident of this path before resuming last year’s easing that saw a series of cuts over the first seven months […] More

New Overnight Developments Abroad - Daily Update

Yen Climbs Further Even as Japanese Golden Week Holidays Begin

April 29, 2016

The yen touched an 18-month high of 106.9 per dollar and is up 0.9% on balance from Thursday’s close.  The trade-weighted dollar is close to a one-year low. Japanese markets were closed for Showa Day.  Next week’s continuing Golden Week holidays are Constitution Day (May 3), Greenery Day (May 4) and Children’s Day (May 5).  […] More

Central Bank Watch

Another Bank of Japan Surprise

April 28, 2016

The BOJ Board did not change any policy settings at this week’s meeting, surprising analysts and investors who almost universally were anticipating the unveiling of new stimulus.  Ever since a Japanese discount rate hike on Christmas Day 1989, I’ve learned to expect anything from Japan’s central bank.  It is ingrained in the institutional culture there […] More

New Overnight Developments Abroad - Daily Update

Investors Shocked by BOJ’s Decision Not to Ease Policy Further

April 28, 2016

The yen climbed 2.6% against both the dollar and euro, the Japanese Nikkei plunged 3.6%, and the 10-year JGB yield fell 3 basis points to -0.09%. The dollar otherwise fell 1.2% against the kiwi and is down 0.3% relative to the loonie, Swissie, yuan, Aussie dollar and sterling.  EUR/USD is flat. In other equity news, […] More

Central Bank Watch

Central Bank of Brazil

April 27, 2016

The Brazilian Selic rate was retained at 14.25%.  It’s been at that level since a 50-basis point hike at the end of last July, which culminated 325 basis points of increases since October 2014.  The tightening was prompted by a huge inflation overshoot relative to the 4.5% target, fueled by real depreciation.  Although inflation has […] More

Central Bank Watch

Reserve Bank of New Zealand: No Changes

April 27, 2016

New Zealand’s Official Cash Rate was left at 2.25%, and a released statement said the kiwi remains overvalued, inflation is low, and that “further policy easing may be required to ensure that future average inflation settles near the middle of the target range.”  The OCR was sliced by 25 basis points at the last meeting […] More

Deeper Analysis

An Equivocal FOMC Statement

April 27, 2016

Today’s statement from the Federal Open Market Committee neither shuts out the possibility of an interest rate hike at the June 14-15 meeting nor builds an overwhelming case for acting then unless something vastly unforeseen were to happen.  This was a two-handed explanation. On the one hand, committee members are less worried about external risks […] More

Central Bank Watch

FOMC Preview

April 27, 2016

Six weeks have passed since the March16 FOMC statement and ensuing press conference.  My review of those events can be seen here.  Since the statement’s release, the dollar has fallen 2.0% against the euro and 2.2% relative to the yen.  The 10-year Treasury yield is declined ten basis points on balance, while the Dow Jones […] More

css.php