Archive for February 2019

Deeper Analysis

February in Figures

February 28, 2019

Sterling and the dollar strengthened during February. Ten-year sovereign debt yields rose slightly more sharply in the month than their counterparts in the other countries featured in the table below, but none of the central bank rates among them were changed. Equities in most of the places continued to recover, although not as much as […] More

Deeper Analysis

U.S. GDP

February 28, 2019

U.S. real GDP expanded 2.6% at a seasonally adjusted annual rate last quarter, down from 3.4% in 3Q and 4.2% in the second quarter of 2018. Personal consumption and nonresidential investment accounted for all of the rise. Residential construction recorded a fourth straight contraction. Net exports exerted a smaller drag of 0.2 percentage points. Inventories […] More

New Overnight Developments Abroad - Daily Update

No Deal Between U.S. and North Korea and a Whole Lot of Data Released

February 28, 2019

The summit between U.S. President Trump and North Korean President Kim ended prematurely without an agreement. Share prices in Asia lost 1.8% in South Korea, 1.3% in Indonesia, 1.2% in Singapore, 0.9% in Hong Kong, 0.8% in Japan but only 0.4% in China. In Europe, there’s been scant net movement in the German Dax or […] More

New Overnight Developments Abroad - Daily Update

Soft Data and Event Risk

February 27, 2019

It’s been a mixed morning for the dollar, which is unchanged against the yen and euro, 0.4% firmer against the Australian and New Zealand currencies, but down 0.5% versus sterling, 0.3% relative to the yuan and loonie, 0.2% vis-a-vis the Swiss franc, and 0.1% against the peso. WTI oil advanced 2.1%, while the price of […] More

Deeper Analysis

Powell’s Humphrey Hawkins Testimony

February 26, 2019

Fed Chairman Powell statement before the Senate Banking Committee presents a decent baseline view of the U.S. economy, observing a strong labor market and projecting inflation around the 2% target once some transitory depressants pass. However, the following two paragraphs lay out a number of undesirable short-term and longer run developments that ought to be […] More

Central Bank Watch

No Change in Hungarian Monetary Policy at Latest Review

February 26, 2019

Magyar Nemzeti Bank’s base rate has been at 0.90% since a 15-basis point cut in May 2016, and Hungary’s overnight deposit rate has been negative 0.15% since a a 10-basis point reduction in September 2017. A statement released today after the latest review speaks of eventual normalization: The Monetary Council is prepared for the gradual […] More

New Overnight Developments Abroad - Daily Update

Theresa May Has Spoken.. and Awaiting Powell’s Testimony

February 26, 2019

Prime Minister Theresa May blinked. If a Brexit deal can’t be agreed upon, Parliament will be given the opportunity to vote on delaying an exit without a deal. She spoke of a two-year transition in which the U.K. will continue to honor its commitments to the EU. Sterling rose 0.5% following her remarks, and the […] More

Foreign Exchange Insights and Next Week

Shifting World Image of the United States Not Depressing Dollar Yet

February 25, 2019

The dollar’s external value rarely makes news headlines except in times of extreme strength or, even more common, extreme weakness. Neither extreme characterizes current circumstances, but there it was this past Saturday. The lead left-column front-page story in the New York Times proclaimed, “Staying mighty, dollar fortifies Trump’s power to dictate foreign policy.” The dollar […] More

New Overnight Developments Abroad - Daily Update

Chinese Share Prices Rocket Higher

February 25, 2019

A threatened U.S. escalation of the tariff war with China set for March 1st was called off. President Trump said trade talks this past weekend yielded substantial progress and said that contingent upon continuing progress he would host a finalizing summit with Chinese President Xi at his club in Florida. No date given. China’s stock […] More

Foreign Exchange Insights and Next Week

Next Week

February 22, 2019

Central Banks: Monetary policy reviews in South Korea, Hungary, and Israel. Federal Reserve Board Chairman Powell testifies for two days on the economic outlook and monetary policy, first to the Senate Banking Committee on Tuesday and then the House Financial Services Committee on Wednesday. This so-called Humphrey Hawkins testimony is required twice yearly. Other Fed […] More

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