Archive for October 2016

New Overnight Developments Abroad - Daily Update

Bond Selloff Gathers Impetus

October 27, 2016

Investor caution has shifted from stocks to bonds. Dollar changes against currencies of other advanced economies have been limited. Several emerging market currencies — e.g. the rand and won — have depreciated. Economic data released today have generally accentuated the positive. The dollar lost 0.2% against the euro overnight and 0.1% relative to the loonie […] More

New Overnight Developments Abroad - Daily Update

Price of Oil Softens Further

October 26, 2016

It appears that Russia will probably not join OPEC’s effort to cut production. In response, West Texas Intermediate crude oil fell another 1.4% to $49.25 per barrel. Stocks in Europe and the Pacific Rim have performed weakly overnight, depressed by a number of weaker-than-expected corporate earnings reports. Equities lost 1.5% in New Zealand and Australia, […] More

Central Bank Watch

Magyar Nemzeti Bank Cuts Reserve Requirement

October 25, 2016

Hungary’s central bank left its base rate at 0.90% and its overnight deposit rate at -0.05% but cut its overnight lending rate by 10 basis points to 1.05% and its reserve requirement in half to 1%. A released statement¬†projects growth around 3%, observes continuing spare capacity and sub-target inflation, and predicts a gradually rising inflation […] More

New Overnight Developments Abroad - Daily Update

Optimistic Mood

October 25, 2016

Commodity prices are higher, led by metals. WTI oil and Comex gold climbed 0.6% and 0.5% to $50.84 per barrel and $1,269.80 per ounce. Markets are discounting a higher likelihood of a fed funds hike this year, but investors increasingly believe the U.S. economy can tolerate such action. U.S. political opinion polls continue to indicate […] More

Foreign Exchange Insights and Next Week

The Rest of this Week

October 24, 2016

Central Banks: Monetary policy meetings in Russia, Israel, Norway, Sweden, Ukraine and Hungary. Bank of Canada Governor Poloz, ECB President Draghi, and Bank of England Governor Carney speak publicly as does Atlanta Fed President Lockhart. U.S. Data Releases: The monthly FHFA and Case Shiller house price indices, new home sales, pending home sales, durable goods […] More

New Overnight Developments Abroad - Daily Update

Favorable Developments

October 24, 2016

Stocks strengthened. Long-term bond yields slipped a bit. Preliminary purchasing managers indices in October beat expectations. Japan’s trade surplus widened on better-than-anticipated exports. Portugal’s credit rating avoided a downgrade. Spain’s stalled politics took a step forward. Corporate news has been more supportive than assumed. The dollar is narrowly mixed. it’s up 0.2% against the yuan […] More

New Overnight Developments Abroad - Daily Update

Awaiting the ECB Meeting Decision and Press Conference

October 20, 2016

EUR/USD is unchanged ahead of the ECB announcement. A policy change is not expected. Central bank policymakers also reviewed stances in Turkey and Indonesia. The dollar has strengthened 0.3% against the yen. Japan’s Nikkei closed 1.4% higher, while the German Dax is up 0.3%. WTI oil settled back 1.0% to $51.07 per barrel. Comex gold […] More

Central Bank Watch

Bank of Canada Retains 0.5% Interest Rate Target and Lowers Projected Growth and CPI Path

October 19, 2016

The statement released by monetary officials projects GDP growth of 1.1% in 2016, down from a prior projection of 1.3%. Growth in 2017 and 2018 have been reduced to 2.0% from 2.2% and 2.1%, respectively. ¬†The change reflects slower near-term housing resale activity and a lower export trajectory. Growth is now surpassing potential, but spare […] More

Central Bank Watch

Central Bank of Chile

October 19, 2016

Chile’s monetary policy rate was left unchanged at 3.5%, its level since hikes of 25 basis points implemented in September and December of 2015. A released statement observes that inflation has recently fallen faster than anticipated and that interest rates elsewhere are low. Growth was sluggish last quarter in Chilean output and demand, and the […] More

New Overnight Developments Abroad - Daily Update

Oil Price Rally Continued

October 19, 2016

West Texas Intermediate crude oil, which traded at $43.30 per barrel just a month ago, rose another 1.5% overnight to $51.02 per barrel. Investors are reasonably confident that OPEC will find the discipline with Russia to reach an accord limiting production. Comex gold advanced 0.7% to $1,271.50 per troy ounce, and the dollar is modestly […] More

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