Central Bank Watch
ECB’s First Policy Meeting of 2018
January 25, 2018
The January meeting of the ECB Governing Council, the first of eight scheduled policy reviews in 2018, resulted in a consensus to leave all policy settings unchanged and the publication of a statement whose appraisal of the euro area economy and guidance to future policy can be best summarized by the fourth paragraph: Incoming information […] More
New Overnight Developments Abroad - Daily Update
Dollar Extends January Losses
January 25, 2018
The dollar declined overnight by 0.5% versus the yuan, 0.4% relative to the Swiss franc and sterling, and 0.2% against the euro, yen, and peso. President Trump arrived in Europe to attend the Davos World Economic Forum. His threat of protectionism is now transitioning into actual action. The Governing Council of the European Central Bank […] More
Foreign Exchange Insights and Next Week
Dollar Reflecting an Erosion of Respect
January 24, 2018
Viewed from a very wide angle lens, currency valuations reflect the present value of a country’s perceived future. The perceived economic potential of a nation plays a big role in this evaluation. Investors want a store of value that is associated with a steady and desirable rate of inflation. A currency that holds its internal […] More
New Overnight Developments Abroad - Daily Update
International Tensions Over Trade Deepen
January 24, 2018
Former U.S. Secretary of Treasurer Robert Rubin famously said in 1995 that a “strong dollar is in the best interest of the United States” because it promotes price stability, lowers interest rates, and attracts productive foreign capital. That thinking went on to characterize U.S. policy for more than 20 years until the election of President […] More
Central Bank Watch
Bank of Japan Stays Its Course
January 23, 2018
The board of the Bank of Japan deliberated over two days for a combined four hours 35 minutes and arrived at the same decision as in December or October for that matter when the previous Outlook for Economic Activity and Prices was prepared. The vote at all three meetings was the same, 8-1, with Goushi […] More
New Overnight Developments Abroad - Daily Update
Trump Grabs Spotlight… Japan Also in the News
January 23, 2018
President Trump is on a roll. Having secured a tax cut with benefits skewed to the rich and then trapping congressional democrats in a political snake pit over immigration, he’s turned his sight on the biggest campaign promise of all: so-called fair trade. A 30% tariff on U.S. imports of foreign-made solar equipment threatens to […] More
New Overnight Developments Abroad - Daily Update
The Contrast of a Continuing U.S. Political Impasse and an Important Success in Germany
January 22, 2018
The U.S. government shutdown since midnight Friday entered its third day. A senate vote planned initially for late Sunday was moved back to noon today. The rift is primarily over immigration law but with deepening rifts over class, race, ancestral identity, gender, and between generations. In Germany at a special convention of the Social Democratic […] More
Foreign Exchange Insights and Next Week
Next Week
January 19, 2018
World Economic Forum: Annual conference in Davos, Switzerland, bringing together leaders of business, politics and academia. This year’s theme is “Creating a Shared Future in a Fractured World.” The WEF begins Tuesday and runs through the end of the week. Central Banks: Both the Bank of Japan and European Central Banks will be holding policy […] More
Central Bank Watch
South African Reserve Bank Repo Rate Kept at 6.75%
January 19, 2018
The main South African central bank interest rate was reduced 25 basis points six months ago to its current 6.75% level. This move represented a directional shift. Six prior increases from June 2014 until March 2016 had raised the rate from 5.0% to 7.0%. The result of this week’s first policy review of 2018 was […] More
New Overnight Developments Abroad - Daily Update
U.S. Federal Government Shutdown at Midnight Still Possible
January 19, 2018
Talks to avert a U.S. fiscal shutdown at the end of today have degenerated into a 3-way circus. House Republicans passed a short-term fix that excludes DACA but enhances CHIP child support. President Trump’s tweets endorse the CHIP enticement only as part of a long-term solution and continue to insist on funding for the Mexican […] More
