New Overnight Developments Abroad - Daily Update
ECB and Turkish Monetary Officials Send Dovish Signals
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
New Overnight Developments Abroad - Daily Update
More Evidence that Tariffs Are Hurting Manufacturing All Over
July 24, 2019
Preliminary purchasing manager survey results from July in Japan, Australia, Euroland, and the U.S. were published today, and their main message is that trade wars hurt just about everybody. Japan’s manufacturing PMI printed below 50 for a third straight month and the fifth time in six months. Readings under 50 imply a contraction of activity. […] More
New Overnight Developments Abroad - Daily Update
Dollar Up on Day with Two Large News Developments
July 23, 2019
Boris Johnson, who favors a very hard U.K. break with the EU, was selected as the new leader of the British Conservative Party and will thus succeed Theresa May tomorrow as prime minister. This development greatly increases the likelihood that Britain will leave the European Union by October 31 without any negotiated terms. U.S. congressional […] More
New Overnight Developments Abroad - Daily Update
Stocks Mixed, Bond Yields Lower, Oil’s Up, and the Dollar’s Little Changed
July 22, 2019
Equity markets closed down 1.3% in China and Hong Kong, 0.8% in India, 0.4% in Indonesia, and 0.2% in Japan but have risen in Europe by 0.5% in Germany, 0.4% in Italy and 0.3% in the U.K. and France. U.S. share prices also opened slightly higher. Ten-year U.S., German and British sovereign debt yields slipped […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu
July 19, 2019
Central Banks: Monetary policy reviews are scheduled at the European Central Bank and in Turkey, Russia and Hungary. ECB President Draghi and Reserve Bank of Australia Governor Lowe will be speaking publicly. Special Event: Robert Mueller’s congressional testimony on July 24. Scheduled U.S. Economic Statistical Releases: Preliminary estimate of second quarter GDP. Monthly new and […] More
New Overnight Developments Abroad - Daily Update
NY Fed President Moves Markets Unwittingly
July 19, 2019
John Williams, President of the NY Fed and a permanent member of the FOMC, gave an academic speech asserting that it’s best for central banks to respond quickly in the face of slower economic growth. Investors took his comment as the clearest sign yet that the federal funds rate will be cut at the FOMC […] More
Central Bank Watch
South African Repo Rate cut 25 Basis Points to 6.5%
July 18, 2019
The South African Reserve Bank by unanimous vote has implemented its first interest rate cut in 16 months, a 25-basis point cut of the repo rate to 6.5%. A released statement observes moderating inflation expectations, signaled policy easing by advanced economy central banks, weaker-than-anticipated global economic activity, and “escalating trade and geo-political tensions.” Officials expected […] More
Central Bank Watch
Second Rate Reduction in Ukraine
July 18, 2019
The National Bank of Ukraine implemented the second move of an easing cycle, cutting its discount rate to 17.0% from 17.5%. A half percentage point cut had been also done in April. A released statement asserts that inflation of 9% is on track to keep falling toward the 5% target and should reach that goal […] More
Central Bank Watch
Bank Indonesia Eases
July 18, 2019
Bank Indonesia’s key 7-day reverse repo rate was reduced to 5.75% from 6.0%. It’s the first cut since September 2017. The previous changes were a pair of hikes in September and November of 2018. Today’s easing was justified by in-target inflation, lessening pressure on Indonesia’s balance of payments, and the expectation of easier Fed policy […] More
Central Bank Watch
Bank of Korea
July 18, 2019
The Bank of Korea’s 7-day repo rate was sliced to 1.50% from 1.75% in a move that surprised some analysts and which was ascribed to mounting trade tensions, easing monetary policies in other economies, and geopolitical risks. In taking this step, monetary authorities revised projected GDP growth this year slightly downward from 2.5% to something […] More
