Central Bank Watch
Central Bank of Hungary
December 20, 2017
The central bank’s monetary council again kept the Hungarian base rate at 0.90%, its level since a 15-basis point reduction in May of last year. Inflation still hasn’t risen in a sustained manner to the central bank target, and officials do not expect that happening until the middle of 2019. The post-policy review statement asserts, […] More
New Overnight Developments Abroad - Daily Update
Rise in Sovereign Debt Yields Extended
December 20, 2017
The Senate approved the tax bill without any support from the Democrats by a vote of 51-48. All that remains is one final assured vote today in the House of Representatives and President Trump’s signature on the bill. This legislation is projected to boost economic growth in 2018 but also will raise federal deficit spending […] More
Deeper Analysis
An Improved U.S. Balance of Payments
December 19, 2017
The U.S. current account deficit in the third quarter of 2017 of $100.6 billion was 20% smaller than in the second quarter. The current account comprises net trade in goods (or merchandise) and services, plus net investment income and net transfer payments in and out of the country. The current account is an important measure, […] More
New Overnight Developments Abroad - Daily Update
Market Eyes U.S. Tax Bill
December 19, 2017
President Trump’s signing of a broad tax bill appears fairly imminent. The House of Representatives will vote on the bill today; passage is assured. A senate partisan vote, where Republicans hold a narrower majority, could occur late today and most likely no later than Wednesday. Equities in Asia mostly advanced overnight after a strong U.S. […] More
New Overnight Developments Abroad - Daily Update
Firmer Stock Markets and a Softer Dollar
December 18, 2017
With passage of a U.S. tax cut at mid-week looking increasingly probable, equities rallied in Asia and Europe overnight, and the dollar eased a bit. Dollar declines amount to 0.3% relative to sterling, the euro, Swiss franc loonie and peso, 0.2% against the Australian and and New Zealand dollars, and 0.1% versus the yen. Share […] More
Foreign Exchange Insights and Next Week
Next Week
December 15, 2017
Central Banks: Monetary policy meetings are scheduled in Japan, Sweden, Thailand, the Czech Republic, and Hungary. Minutes from this month’s meeting of the Reserve Bank of Australia will be published (note that January is the one month each year when the RBA doesn’t have a scheduled policy review). Bank of Japan Governor Kuroda and Bank […] More
Central Bank Watch
Bank of Russia
December 15, 2017
Russia’s key monetary policy rate has been reduced by a greater-than-expected 50 basis points to 7.75%. A main reason why central bank officials were able to slice 50 basis points from their interest rate as they did in September and April rather than 25 bps was was done in October, June, and March is related […] More
Central Bank Watch
National Bank of Ukraine
December 15, 2017
Ukraine’s central bank interest rate was raised by another full percentage point to 14.5% just seven weeks after an initial increase of 100 basis points. As in Mexico, inflation has been higher than assumed previously, and a number of price risks continue such as rising food prices, more fiscal deficit spending, some wage pressure, higher […] More
Central Bank Watch
Another Rate Hike at the Bank of Mexico
December 15, 2017
Citing higher-than-desired inflation, the Bank of Mexico under a new president has raised its one-day interbank rate to 7.25% from 7.0%. This is the fourth increase of 25 bps in size this year, following ones in March, May and June. A prior 50 basis point hike last February culminated a series of six half-percentage point […] More
New Overnight Developments Abroad - Daily Update
U.S. Tax Plan Creating Uncertainty
December 15, 2017
Markets are taking a breather. To paraphrase Yogi, the attempted overhaul of U.S. federal taxation ain’t done until it’s done, and uncertainty over whether a plan will be approved next week, the content of such a deal and its likely economic effects has caused investors to pause from their earlier euphoria. The dollar shows losses […] More
