Central Bank Watch
Monetary Policy on Hold at Central Bank of Chile
June 14, 2018
The monetary policy rate has been 2.5% since four 25-basis point cuts implemented within the first five months of 2017, and yesterday’s decision announced late in the day again resulted from a unanimous vote. Officials released a statement that revised the near-term inflation forecast upward due to oil price developments and a depreciated Chilean peso, […] More
New Overnight Developments Abroad - Daily Update
Risk-Off Mood in Financial Marketplace
June 14, 2018
Investors are reacting Thursday to An increasing likelihood of four Fed rate hikes this year and three more in 2019 following yesterday’s federal funds rate increase and hawkish press conference. News today from the European Central Bank that monthly asset buying will be sliced in half to EUR 15 billion from October and eliminated altogether […] More
Central Bank Watch
FOMC Statement and Forecasts
June 13, 2018
Today’s FOMC statement raises the federal funds rate by 25 basis points to a target of 1.75-2.0%, depicts a tighter labor market, upgrades the assessment of personal consumption recent conditions, and deletes the prior observation that market-based measures of inflation are low. The statement also introduces the assertion that inflation consistent with the Committee’s symmetric […] More
Deeper Analysis
FOMC Preview
June 13, 2018
The Federal Open Market Committee is widely expected to enact its second 25-basis point increase in the federal funds target of 2018 and the seventh since December 2015. That will bring the target ceiling to 2.0% for the first time since a cut in October 2008 just four weeks after the collapse of Lehman Brothers. […] More
Central Bank Watch
Central Bank of Iceland Retains 4.25% Key Interest Rate
June 13, 2018
Iceland’s 7-day term interest rate has been at 4.25% since a 25-basis point cut last October, which culminated a 4-step easing cycle that included 25-bp cuts in May and June of last year and an initial 50-bp downmove in August 2016. These reductions exactly reversed three previous rate hikes done in June, August and November […] More
New Overnight Developments Abroad - Daily Update
Awaiting FOMC Statement and Press Conference
June 13, 2018
The Federal Open Market Committee is widely expected to raise the federal funds target later today and will hold a press conference afterward. Markets will comb the new forecasts and dot-plot indication of individual FOMC member preferences regarding the future path of the interest rate. Market attention will remain on central bank policy. The European […] More
New Overnight Developments Abroad - Daily Update
Broad Commitment to a Process Signed by Trump and Kim but Lacking Many Details
June 12, 2018
There’s been little market reaction to the Trump-Kim talks in Singapore. The dollar is up 0.2% versus the yen and loonie, unchanged against the yuan and Aussie dollar, and down 0.1% vis-a-vis the euro, Swiss franc, kiwi, and sterling. Equities advanced 0.9% in China, 0.6% in India and Hong Kong, and 0.4% in Japan. Stocks […] More
New Overnight Developments Abroad - Daily Update
Post-G7 Market Reaction Suppressed ahead of Tomorrow’s Kim-Trump Meeting and Several Key Central Bank Policy Reviews Later this Week
June 11, 2018
The annual summit of Group of Seven leaders over the weekend went poorly (see my review), but share prices mostly rose today in Asia and Europe. Stocks advanced 0.8% in South Korea, 0.5% in Japan, 0.4% in New Zealand, 0.3% in Hong Kong, 0.2% in Singapore, and 0.1% in India but slipped 0.5% in China […] More
Deeper Analysis
Charlevoix G6 Summit Communique
June 10, 2018
Saturday’s statement from leaders of the Group of Seven had little to say about exchange rate policy and affirmed “the crucial role of a rules-based international trading system and continue to fight protectionism.” U.S. President Trump, who favors a Group of Eight including Russia as a more meaningful body than the Group of Seven, initially […] More
Foreign Exchange Insights and Next Week
Next Week
June 8, 2018
Central Banks: Monetary policy reviews by the FOMC, European Central Bank, Bank of Japan, Swiss National Bank, Central Bank of Chile, Bank of Russia, and Bank of Iceland. Powell, Draghi, Kuroda and Jordan will hold post-meeting press conferences at the Fed, ECB, BOJ and SNB. Reserve Bank of Australia Governor Lowe delivers a speech during […] More
