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

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