Archive for May 2018

Central Bank Watch

Hungary’s Accommodative Monetary Policy Settings Left Unchanged

May 22, 2018

The monetary council at Magyar Nemzeti Bank left its base rate at 0.90%, the level since a cut in May 2016 and its overnight deposit rate at negative 0.15%, its level since a reduction last September. Quantitative monetary policies were also not changed. In a released statement, officials observed that inflation is still below the […] More

New Overnight Developments Abroad - Daily Update

A Focus on U.S.-Sino Trade Talks and European Politics

May 22, 2018

Trade tensions between China and the United States appeared to lessen further as China announced it will cut tariffs on autos and progress was reported on a ZTE plan. Italy’s President Mattarella did not immediately endorse the Prime Ministerial choice of Giuseppe Conte proposed by a League and Five Star to lead the next government. Conte […] More

New Overnight Developments Abroad - Daily Update

U.S. Flinches on Threatened Trade War

May 21, 2018

Treasury Secretary Mnuchin said on Sunday talk show that plans to impose massive tariffs on Chinese imports were being suspended amid progress on negotiations. Monday’s other meaningful development has been another 2-basis point increase in the 10-year Treasury yield in futures trading. That rise contrasts with decreased 10-year sovereign debt yields of a basis point […] More

Foreign Exchange Insights and Next Week

Next Week

May 18, 2018

Central Banks: Monetary policy reviews in South Africa, Ukraine, South Korea and Hungary. FOMC minutes to be published. Powell, Harker, Evans, Dudley, Kaplan, Bostic and Kashkari of the Fed speak publicly. So will Reserve Bank of Australia Governor Lowe. Holidays and Events: Whit Monday in Switzerland, France and Germany. Victoria Day on Monday in Canada. […] More

New Overnight Developments Abroad - Daily Update

Some Price Data and a Discouraging Remark from China

May 18, 2018

The dollar firmed overnight by 0.3% against sterling, 0.2% versus the yuan, yen and euro, and 0.1% relative to the loonie. The greenback fell 0.5% against the kiwi and 0.1% vis-a-vis the Swiss franc and is unchanged relative to the Australian dollar and peso. Share prices in the Pacific Rim climbed 1.2% in China, 0.6% […] More

Deeper Analysis

Italy’s Pre-Maastricht Days

May 17, 2018

A headline in today’s Financial Times reads “Italy’s populists pine for pre-euro times.” The recently established Five Star party and the right-wing League have been trying to form a government, and they have been openly considering desired measures to modify their relationship with other members of the European Monetary Union. The Maastricht Treaty signed in […] More

Central Bank Watch

Bank of Mexico

May 17, 2018

The Governing Board of the Bank of Mexico agreed unanimously not to raise the 7.5% overnight interbank rate further at this time. Higher inflation driven by peso depreciation driven by hostile U.S. policies toward Mexico has compelled the central bank authorities to adopt a prudent monetary policy. Starting with a 25-basis point rate hike in […] More

Central Bank Watch

Bank Indonesia Tightens Monetary Policy For First Time Since Late 2014

May 17, 2018

Like their Brazilian colleagues late yesterday, monetary policymakers in Indonesia were compelled by recent foreign exchange market developments, namely the strength of the dollar and depreciation of emerging market currencies like the real and rupiah, to shift policy gears. In Brazil’s case, a long string of interest rate cuts was ended, and in the Indonesian […] More

Central Bank Watch

Central Bank of Brazil Breaks Streak of Interest Rate Cuts

May 17, 2018

Brazil’s key Selic interest rate had been reduced by a total of 725 basis points since October 2016, and Copom, the policy-making committee of the central bank, had not anticipated halting the easing cycle this soon when it previously deliberated in March. But by a unanimous 9-0 vote, officials agreed to leave the Selic rate […] More

New Overnight Developments Abroad - Daily Update

Little Change Overnight in Most Dollar Forex Values

May 17, 2018

Against other major currencies, the dollar is unchanged against the loonie and yuan, up 0.1% relative to the euro, Swiss franc and kiwi, up 0.3% versus the yen, but down by 0.1% against the Australian dollar and sterling. Bigger dollar moves have occurred against emerging market currencies. The greenback dropped 0.3% against the Indonesian rupiah […] More

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