Deeper Analysis
July 2019 in Figures
July 31, 2019
Even though only the Fed among major central banks cut interest rates in July, long-term interest rates declined in Europe but changed hardly at all over the course of the month in the United States, Canada, or Japan. The Fed’s 25-basis point interest rate cut announced on the final day of the month was its […] More
Central Bank Watch
Federal Funds Rate Target Cut and Controlled Reduction of Fed Balance Sheet Suspended Two Months Sooner than Planned
July 31, 2019
The Federal Open Market Committee opted for a 25-basis point interest rate cut, not the 50-bp that some had urged. The released statement also revealed a decision to “conclude the reduction of its aggregate securities holdings in the System Open Market Account in August, two months earlier than previously indicated.” The Committee was divided in […] More
Central Bank Watch
FOMC Preview
July 31, 2019
In the six weeks since the last scheduled FOMC meeting, the dollar has edged up 0.2% against the yen and 0.8% versus the euro. It’s been a period in which Fed officials have prepared markets rhetorically to expect an interest rate cut today, so it’s somewhat surprising that the 10-year Treasury yield is now only […] More
New Overnight Developments Abroad - Daily Update
Lots of Data Out but Dollar Marking Time Ahead of FOMC Announcement
July 31, 2019
The dollar is unchanged against the euro, Swiss franc, yen, loonie and yuan, 0.2% softer relative to the peso and Australian dollar, 0.1% lower versus sterling and 0.2% higher against the kiwi. Analysts expect a 25-basis point federal funds cut to be announced at 18:00 GMT, and Chairman Powell will begin his press conference at […] More
New Overnight Developments Abroad - Daily Update
European Economic Sentiment Stumbled in July
July 30, 2019
European share prices fell Tuesday, depressed by an unexpectedly large slide in economic sentiment in the euro area to a 40-month low of 102.7 in July. That’s down from 105.2 just two months earlier and 111.2 a year ago. Germany’s economic sentiment slumped 2.4 points between June and July. Two big factors are sapping the […] More
Foreign Exchange Insights and Next Week
Brexit Exerting Intensifying Toll on Sterling
July 29, 2019
The pound fell 1.0% overnight against the dollar and euro. In British domestic trading, the FTSE-100 has jumped 2.0%, while the 10-year gilt yield dropped five basis points. The case of sterling exemplifies the fact that so long as global inflation remains subdued, currency depreciation is more desirable economically and politically than currency appreciation. Against […] More
Foreign Exchange Insights and Next Week
Menu of Economic Data and Central Bank Events this Week
July 28, 2019
Central Banks: Monetary policy reviews at the Federal Reserve, Bank of England, Bank of Japan, Bank of Brazil, South African Reserve Bank, and Czech National Bank. Bank of Japan publishes quarterly Outlook and minutes of June monetary policy review. Fed Chairman Powell, Bank of England Carney, and Bank of Japan Governor Kuroda speak publicly. So […] More
Central Bank Watch
Another Russian Central Bank Rate Cut
July 28, 2019
The Board of Directors at the Central Bank of the Russian Federation enacted a second reduction of its one-week repo rate. Both cuts were by 25 basis points. Announced on July 26th, the rate drops to 7.25% and follows an initial easing in mid-June. The two cuts reverse a previous duo of hikes in September […] More
Central Bank Watch
European Central Bank Moving Closer to Reducing Interest Rates and Taking Other Stimulative Actions
July 25, 2019
The European Central Bank Governing Council left policy settings unchanged but signaled likelihood of a multi-pronged stimulus after September’s fuller review. A zero percent refi rate has been flanked by a negative 0.40% deposit rate and a 0.25% marginal lending facility rate since cuts made in September 2016. The ECB leadership is in transition; IMF […] More
Central Bank Watch
Turkey Gets a Big Central Bank Interest Rate Reduction
July 25, 2019
Turkey’s Monetary Policy Committee slashed its one-week repo rate by 425 basis points to 19.75%. That’s a bigger cut than analysts were anticipating but does not completely reverse the final tightening move last September, which was an increase to 24.0% from 17.75%. A statement released by the Central Bank of the Republic of Turkey observes […] More
