New Overnight Developments Abroad - Daily Update
Long-Term Interest Rates Climb Higher All Around the World
October 4, 2018
Ten-year sovereign debt yields extended their recent advance by 13 basis points in Greece, 8 bps in Great Britain, 6 bps in Italy, Germany and The Netherlands, 5 bps in France, 3 bps in U.S. Treasury futures, and 2 basis points in Japan. Fed Chairman Powell expressed strong confidence in an interview yesterday that solid […] More
Deeper Analysis
Spread Widens Between U.S. Non-Manufacturing PMI and Euroland’s Services PMI
October 3, 2018
The ISM-compiled U.S. non-manufacturing purchasing managers index rose 3.1 points in September to 61.6, which is a record high for this 10-year-old data series. Sub-indices for business activity/production and for jobs climbed by 4.5 points and 5.7 points, while those for prices and new business were 1.4 and 1.2 points above their August readings. The […] More
New Overnight Developments Abroad - Daily Update
Less Concern about Italy than Felt Yesterday
October 3, 2018
After Italy’s government had worried markets earlier by submitting a budget with a deficit of 2.4% of GDP, informed sources said that deficits would shrink after next year and settle back to 2.0% of GDP in 2021. A relief rally saw the 10-year sovereign Italian debt yield shed 13 basis points and Italy’s share prices […] More
New Overnight Developments Abroad - Daily Update
Intensifying Concern that Euro Area Is Drifting Into a Fresh Debt Crisis over Italy
October 2, 2018
A quote from European Commission President Jean-Claude Junker set the tone for trading today: “I would not wish that, after having really been able to cope with the Greek crisis, we’ll end up in the same crisis in Italy.” Ten-year sovereign debt yields, while dropping today by 3 basis points in France, Germany, The Netherlands, […] More
Deeper Analysis
Trade War Concerns Affected U.S. and Euroland Manufacturing Purchasing Manager Indices Equally in September
October 1, 2018
In September, the ISM-Compiled factory PMI index fell 1.5 points to 61.3, while the IHS-compiled euro area PMI dropped 1.4 points to 54.6. The manufacturing sectors continued to improve, but the lower scores in each economy reflects a reduced rate of improvement in operating conditions. And America’s relative advantage was preserved, but the data do […] More
New Overnight Developments Abroad - Daily Update
Fourth Quarter Opens with Japanese Tankan Survey and a Slew of Manufacturing PMI Surveys
October 1, 2018
China will be closed all week, commemorating the communist revolution of 1949. Hong Kong’s market was similarly shut, and so was Australia’s due to Labour Day and the Queen’s Birthday observance there. A three-country Nafta remake including Canada as well as Mexico was fashioned at the last minute. Changes from the original deal were less […] More
Deeper Analysis
September and Third Quarter in Figures
September 29, 2018
Central bank policy rates were raised during the third quarter in the United States, U.K., and Canada but left unchanged in Japan, Switzerland and Euroland. Nevertheless, long-term interest rates climbed noticeably in all six of those economies. Thus, 10-year differentials between the U.S. and the other countries didn’t shift all that much. Moreover, the squeeze […] More
Foreign Exchange Insights and Next Week
Next Week
September 28, 2018
Central Banks: Monetary policy reviews in Australia, India, Iceland, Poland, Sri Lanka, Romania and Mexico. Bank of Japan’s quarterly Tankan survey of corporate conditions and expectations will be published Monday. Powell, Mester, Rosengren, Barkin, Evans and Quarles are among the Fed officials speaking in public next week. Holidays and Events: China is shut all week […] More
New Overnight Developments Abroad - Daily Update
Quarter-End Rush of Data, Italian Fiscal Concerns, and U.S. Supreme Court Drama
September 28, 2018
The new populist government of Five Star in Italy passed a stimulative budget, with a deficit equal to 2.4% of GDP and well above what Italy’s Euroland colleagues wanted to see. In response, the country’s 10-year sovereign debt yield leaped 33 basis points to 3.22%, while the comparable Greek sovereign debt yield went up 16 […] More
Central Bank Watch
Bank Indonesia Tightens Again
September 27, 2018
Amid continuing domestic demand-led growth, a greater-than-desired current account deficit, and and external environment that puts many emerging market currencies and the financial markets at some risks, Bank Indonesia’s Board of Governors sanctioned a fifth hike of the seven-day reverse repo rate from its past six meetings. The rate, which now becomes 5.75%, has now […] More
