Archive for June 2016

Deeper Analysis

June and the Second Quarter in Figures

June 30, 2016

June and the second quarter were a volatile time in financial markets with mixed results, a few surprises and some odd juxtapositions.  The table below shows end-June levels and their comparisons to end-May and end-second quarter levels.  A unifying theme in both the last month and the spring quarter involved deep declines in sovereign debt […] More

Central Bank Watch

National Bank of Romania Keeps 1.75% Interest Rate but Flags Risks

June 30, 2016

Romania’s policy interest rate has been 1.75% since a 25-basis point cut in May 2015 that culminated 350 basis points of reduction over the prior two years.  A statement released after the central bank Board’s latest policy review highlighted new downside risks to be monitored.  “Banca Naţională a României the external environment is marked by […] More

Central Bank Watch

Czech National Bank Policy Left the Same

June 30, 2016

The decision to leave Czech monetary policy settings had been expected.  The two-week repo rate has been 0.05%, effectively zero in functionality terms, since November 2012, and an asymmetric intervention-enforced foreign exchange cap on koruna strength at 27 per dollar was imposed as an extra tool one year later.  Officials released this brief statement. Copyright […] More

Central Bank Watch

Taiwanese Monetary Policy Eased Further in the face of Weak Chinese Demand and Brexit Concern

June 30, 2016

Policymakers at the Central Bank of the Republic of China unanimously cut Taiwan’s discount rate to 1.375% from 1.50%.  Reductions of 12.5 basis points had also been agreed upon at the three prior quarterly policy reviews.  A statement released today introduces a fresh concern: In last week’s referendum, the United Kingdom voted to leave the […] More

New Overnight Developments Abroad - Daily Update

Deluge of Politics and Economics at Midyear

June 30, 2016

Today’s Brexit bombshell is that the Leave movement’s leader, Boris Johnson, pulled out of the running to be Britain’s next prime minister and the person to decide when to invoke Article 50 of the Lisbon Treaty, which guides the unprecedented countdown for exiting the European Union.  Johnson’s decision presumably will further delay what happens from […] More

Deeper Analysis

Comment on U.S. GDP Growth and Trade Protectionism

June 29, 2016

The second and final revision of U.S. growth between the final quarter of 2015 and the first one of 2016, released yesterday, was revised upward by 0.3 percentage points to 1.1% at a seasonally adjusted annualized rate (saar).  The initial growth estimate reported in late April had been 0.5% saar.   Commentary surrounding the report […] More

New Overnight Developments Abroad - Daily Update

Tuesday’s Market Rebound Extended

June 29, 2016

European share prices have risen an additional 2.8% in Spain, 2.5% in France, 2.4% in the U.K. and Italy,  2.2% in Switzerland, 1.9% in Germany and 1.2% in Greece. Sterling is trading currently at $1.3421, up another 0.6% and 2.3% above the 30-year low seen on Monday. The dollar has also settled back 1.0% against […] More

New Overnight Developments Abroad - Daily Update

Post-Brexit Market Moves Reversed Slightly Ahead of EU Council Meeting

June 28, 2016

The dollar settled back 0.9% against sterling and the kiwi, 0.8% versus the Australian currency, 0.7% relative to the loonie, and 0.6% vis-a-vis the euro and yen.  The yuan and Swiss are mostly unchanged.  Emerging market currencies did better today as well. Ten-year sovereign debt yields rebounded six basis points in the U.K., 3 basis […] More

Foreign Exchange Insights and Next Week

Bad Time for a Market Shock

June 27, 2016

The British referendum result delivered bad news and not merely because it defied street expectations or the widely held view of investors, economists, world leaders, and central bankers that the British, European and world economies would be poorly served by a verdict to take Britain out of the EU.  No time is good for bad news, but […] More

Central Bank Watch

Bank of Israel’s Monetary Policy to “Remain Accommodative for a Considerable Time”

June 27, 2016

Israel’s central bank rate has been at 0.1% since a 15-basis point cut in February 2015, which was preceded by 75 bps worth of easing in each of 2011, 2012, 2013, and 2014.  Nonetheless, current inflation of 0.5% is not expected to rise into target until around the middle of next year.  Projected Israeli growth […] More

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