Foreign Exchange Insights and Next Week
Next Week
August 3, 2018
Central Banks: Central banks hold monetary policy reviews in Australia, New Zealand, Thailand, The Philippines, Peru, Romania and Serbia. Australia’s quarterly Monetary Policy Statement and minutes from the Bank of Japan Board meeting to be published. Barkin of the Fed speaks publicly, as will Reserve Bank of Australia Governor Lowe. Holidays: August Civic holiday in […] More
Deeper Analysis
Narrower U.S. Non-Manufacturing Advantage Last Month Versus Euro Area
August 3, 2018
The July spread between the ISM non-manufacturing U.S. purchasing managers index and IHS’s service-sector PMI for the euro area was 2.4 points smaller than June’s differential. In combination with a 2.3-point contraction of their manufacturing PMI spread reported earlier this week, the sum of the two first differences was slightly more than halved to 4.5 points, […] More
New Overnight Developments Abroad - Daily Update
Service Sector PMI Surveys and U.S. Jobs Data
August 3, 2018
The U.S. Labor Department’s July jobs and wage data will be released shortly. Investors are already digesting PMI data reported overnight. Euroland’s composite purchasing managers survey (comprising both manufacturing and service sector activities) dropped back to a 2-month low of 54.3 in July from a 4-month high in June of 54.9. The services PMI had […] More
Central Bank Watch
Bank of Mexico Decides Not to Raise Interest Rate after Latest Policy Review
August 2, 2018
The Governing Board kept its overnight interbank interest rate at 7.75% but observed in a released statement that “since the last monetary policy decision, the balance of risks to the forecasted trajectory of inflation remains biased upwards, in an environment of high uncertainty.” There had been two 25-basis point hikes this year — in February […] More
Central Bank Watch
Czech National Bank Lifts 2-Week Repo Rate to 1.25% from 1.00%
August 2, 2018
Developing economies like that of the Czech Republic depend on capital inflows, and these have diminished as a result of U.S. President Trump’s protectionist agenda. Currencies have depreciated, forcing central banks to raise interest rates and counter imported inflation. Today’s Czech National Bank rate increase is the fifth of the cycle, following moves of 20 […] More
Central Bank Watch
Bank of England Tightens a Second Time
August 2, 2018
Following up on an initial interest rate hike last November, the Monetary Policy Committee by unanimous vote raised Britain’s Bank rate from 0.50% to 0.75%, highest since March 2009. The policy governing the Bank of England’s holdings of gilts and corporate bonds was not changed, and a released statement gave the following forward guidance to […] More
New Overnight Developments Abroad - Daily Update
Share Prices Falter… British and Czech Central Bank Rates Hiked
August 2, 2018
The tone of tariff threats between the United States and China has intensified. The Turkish lira tumbled to an all-time low beyond the 5 per dollar level yesterday in response to the imposition of U.S. sanctions against the Turkish Minister of Justice. The lira had already been under siege as a result of accelerating inflation […] More
Central Bank Watch
Brazilian and Indian Monetary Policy Decisions
August 1, 2018
Central Banks in two of the four BRIC economies held monetary policy reviews. Coincidentally, while the Brazilian Selic rate was left unchanged at 6.50%, the Indian repo rate was lifted 25 basis points to rest also at 6.50%. Previously, the Selic rate was lowered sharply by 50 basis points in 2016, 675 bps last year […] More
Central Bank Watch
FOMC Leaves Interest Rate Unchanged, Upgrades GDP and Personal Consumption Assessments
August 1, 2018
Today’s statement sets the stage for a likely eighth interest rate hike at the next FOMC meeting in September. Assessments of overall growth and the key consumption component of demand were each upgraded to “strong.” Policy continues to be characterized as accommodative and thereby supportive of “strong labor market conditions and a sustained return to […] More
Central Bank Watch
FOMC Preview
August 1, 2018
The federal funds target in the current campaign of rate normalization has undergone seven 25-basis point increases, their dates being December 2015, December 2016, March, June and December of 2017, March 2018 and, most recently, on June 13th at its previous meeting. Today’s announcement at 14:00 EDT will not be accompanied by new forecasts nor […] More
