Central Bank Watch
Central Bank of the Republic of Turkey
May 24, 2018
The world’s biggest currency market story earlier this week had been the accelerating dive of the Turkish lira, exacerbated by its central bank’s benign neglect of a deepening currency rout. To be sure, monetary officials were simply abiding by the substantial pressure from Turkish President Erdogan not to raise interest rates. A 275-basis point cumulative […] More
Central Bank Watch
National Bank of Ukraine
May 24, 2018
Ukraine’s policy interest rate was lifted four times within a half year: 100 basis points last October, December and March and by 15o bps in January. In a statement after keep the rate steady at 17.0%, the central bank board underlines that its belief that policy is now sufficiently tight to achieve the medium-term target […] More
Central Bank Watch
Bank of Korea
May 24, 2018
There has thus far been only one 25-basis point rate hike following five such cuts administered from March 2014 to June 2016, and a half year has now elapsed since that sole increase. This week’s decision to leave policy unchanged with the repo at just 1.50% was the sixth meeting in a row to end […] More
Central Bank Watch
South African Reserve Bank
May 24, 2018
A 25-basis point cut of the SARB repo rate to 6.50% in March had been the second such move since last July but was approved by only a thin 4-3 vote of the central bank’s monetary policy committee. Insofar as core inflation rose 0.4 percentage points in April to 4.5%, it was not surprising that […] More
New Overnight Developments Abroad - Daily Update
Turkey Attempts to Stop Lira’s Rout… Other Geopolitical Strains Simmer
May 24, 2018
The Central Bank of the Republic of Turkey hiked the late liquidity window interest rate by three full percentage points to 16.5% after the Monetary Policy Committee held an unscheduled meeting. The lira had been plunging in one-sided market conditions but rebounded over 6% following the announcement. Italian Prime Minister-Designate Conti met with party leaders, […] More
Central Bank Watch
FOMC Minutes
May 23, 2018
Comments within the May 1-2 minutes regarding U.S. economic conditions and prospects are unsurprising and embody little change. The labor market is strengthening, GDP growth is moderately paced, and inflation is hovering not far from target. One excerpt always of interest is the language on likely future monetary policy: With regard to the medium-term outlook for […] More
New Overnight Developments Abroad - Daily Update
Three-Pronged Blow to European Confidence
May 23, 2018
Italy is poised to get a populist, anti-euro, anti-austerity, and pro-Russia governing coalition. Being the third largest economy to use the euro, this development poses an existential risk to the common European currency that is far greater than the debt problems of Greece. Ten-year sovereign debt yields rose 10 basis points today in Italy in […] More
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
