Central Bank Watch

Bank of Mexico’s Overnight Interbank Rate Lifted Another 25 Basis Points to 6.75%

May 18, 2017

Mexican monetary authorities raised their key interest rate for the ninth time since December 2015. Like the prior tightening at end-March and the first one of this sequence, today’s was 25 basis points in size. The other six moves were by 50 basis points each. Cumulatively, the interest rate has now been increases 375 basis […] More

Central Bank Watch

No Change Made in Indonesian Monetary Policy at Monthly Review

May 18, 2017

Bank Indonesia’s seven-day reverse repo rate has been at 4.75% since its sixth 25-basis point reduction of 2016 was implemented last October. This key rate will continue to be flanked symmetrically by a 4.0% overnight deposit facility rate and a 5.5% lending facility rate. Officials released a statement after their review defending the current stance and […] More

New Overnight Developments Abroad - Daily Update

Investors Remain Very Risk Averse and Driven by Politics, Not Data

May 18, 2017

Sovereign debt yields continue to fall. In futures, the 10-year Treasury yield of 2.19% is down four more basis points and shows a 22-basis point plunge since the May 10th close. Comparable German bund and British gilt yields fell six and 3 basis points thus far today. The Japanese JGB is unchanged after data showing […] More

Central Bank Watch

National Bank of Poland

May 17, 2017

Prior to November 2012, the Polish central bank reference interest rate had been 4.75%. 2.25 percentage points of monetary easing were implemented by July 2013, and two cuts of 50 basis points each in the first quarter of 2015 reduced the key rate to a record low of 1.5% where it has remained for the […] More

Central Bank Watch

Central Bank of Iceland

May 17, 2017

A stronger anchor for inflation expectations at target and the appreciation of the króna have enabled the Monetary Policy Committee to achieve its legally mandated price stability objective with a lower interest rate than would otherwise have been possible. Officials undertook a third cut of the 7-day repo rate during the past year, but at […] More

New Overnight Developments Abroad - Daily Update

Cheaper Dollar as U.S. Political Surprises Mount

May 17, 2017

The dollar fell overnight by 0.7% against the yen, 0.4% relative to the euro, Swiss franc and sterling, and 0.1% versus the kiwi. The dollar alternatively rose 0.4% against the peso, 0.3% versus the Aussie dollar, ad 0.2% relative to the loonie. Ten year German bund and British gilt yields are two basis points lower, […] More

New Overnight Developments Abroad - Daily Update

Another U.S. Gaffe Lifts Euro to a 6-Month High

May 16, 2017

President Trump is alleged to have divulged elements of classified information regarding a terrorist plot to the Russians. He claims to have broken no law in doing so, but the optics surrounding this incident compound an already very toxic climate in U.S. politics. The dollar fell overnight by 0.7% against the euro (to a half-year low), […] More

Foreign Exchange Insights and Next Week

Dollar Not Reacting Excessively to U.S. Political Instability

May 15, 2017

Not in decades has “Watergate” been so often cited in the news as a base of comparison for judging current events. Forty-five years separate the Trump Presidency from the criminal break-in to Democratic Party headquarters on June 17, 1972. This wide expanse of time is as great as Watergate was from the roaring 20s and […] More

New Overnight Developments Abroad - Daily Update

Commodity Prices Strengthen, Dollar and Yen Fall

May 15, 2017

Over the weekend, Saudi Arabia and Russia agreed to extend their previously negotiated oil production cut to the end of the first quarter of next year. Finance ministers and central bank chiefs releases a statement after two days of talks in Bari, Italy. See review. IT made some progress combating Friday’s global cyber attack, but tens of […] More

Deeper Analysis

Bari Statement of G7 Finance Ministers and Central Bank Governors

May 14, 2017

Group of Seven finance ministers and central bank chiefs released a five-page statement following their two days of talks in Bari, Italy. The meeting was a preamble to the summit of G7 leaders later this month in Sicily. It will be the first one attended by President Trump, and the broad waves he has been […] More

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