Central Bank Watch

Reserve Bank of Australia

October 3, 2017

The Official Cash Rate of the RBA was last reduced in August 2016, the second of two 25-basis point cuts that year. The OCR previously had been cut from a peak of 3.5% by 50 basis points in the final quarter of 2012, another 50 bps during 2013 and 50 bps in 2015, and the […] More

New Overnight Developments Abroad - Daily Update

Upbeat Investor Mood in Spite of Vegas Tragedy

October 3, 2017

The dollar rose overnight by 0.3% against the yen and kiwi, 0.2% relative to the peso and 0.1% vis-a-vis the Australian dollar. The dollar also drifted 0.2% lower against the euro and 0.1% versus the loonie and Swiss franc. Both gold and oil slipped 0.2% overnight. The Chinese, German and South Korean markets are closed. […] More

Deeper Analysis

Manufacturing growth in the U.S. Accelerated More Rapidly in September than its Euro Area Counterpart

October 2, 2017

A grinding appreciation of the euro has been correlated with an improving trend in U.S. manufacturing relative to its Euroland counterpart. The euro last month averaged $1.1905, the strongest monthly mean since December 2014. Not coincidentally, the U.S.-minus-Euroland factory PMI differential of +2.7 in September was higher than any month since December 2014. The Institute […] More

New Overnight Developments Abroad - Daily Update

Final Quarter of 2017 Kicks Off With a Bang

October 2, 2017

Spain’s Catalan region is closer to a declaration of independence after the weekend’s vote, which the national government considered illegal, evoked widespread police violence directed at people trying to vote. Spanish equities tumbled 1.5% in response, and Spain’s ten-year sovereign debt yield leaped ten basis points.┬áThe euro was dragged 0.6% lower against the dollar. A […] More

Deeper Analysis

September and Third Quarter in Figures

October 1, 2017

The Fed, ECB, and BOJ did not change monetary policy during the third quarter, so short-term interest rates were very stable. But more hawkish talk from the Fed and ECB, a surprise Bank of Canada rate hike, and higher British inflation lifted longer-term rates in those economies during the quarter. A mixed dollar in August […] More

Foreign Exchange Insights and Next Week

Next Week

September 29, 2017

Central Banks: Monetary policy reviews scheduled in Australia, India, Iceland, Poland, Hungary, and Romania. Various Fed officials will be speaking publicly, including Yellen, Dudley, Powell, Williams, Bostic, Harker, George and Kapan. Minutes of the ECB Governing Council meeting to be published. Holidays: China all week to commemorate Communist revolution victory in 1979. Hong Kong on […] More

New Overnight Developments Abroad - Daily Update

Ton of Released Data but Tepid Market Reaction

September 29, 2017

Strong dollar gains this week were in most cases not extended on the final business day of September and the quarter. The dollar is down 0.2% against the euro and 0.1% relative to the yuan and Swiss franc. The loonie and peso are unchanged. The dollar rose 0.2% against the New Zealand and Australian dollars, […] More

Central Bank Watch

Reserve Bank of New Zealand

September 28, 2017

New Zealand’s official cash rate has been at a record low of 1.75% since a 25-basis point reduction in November 2016, and that’s only half as high as the 3.50% peak maintained from July 2014 until June 2015. Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to […] More

New Overnight Developments Abroad - Daily Update

U.S. Tax Reform Details Extend Rise in Sovereign Debt Yields

September 28, 2017

Ten-year sovereign debt yields climbed additionally overnight by 3 basis points in the U.S., Japan and Germany and 2 bps in Great Britain. The dollar see-sawed. On balance, it advanced 0.4% against the Australian dollar and Chinese yuan and by 0.2% versus the Swiss franc, but it slipped 0.2% against the euro and 0.1% relative […] More

Central Bank Watch

Czech National Bank

September 27, 2017

Monetary officials kept their 2-week repo rate at 0.25% at today’s policy review after having broken a streak dating back to November 2012 when such had been pinned at 0.05%. A ceiling on the koruna at 26.0 per euro, which was introduced in November 2013, was lifted back in April, but authorities reserve the right […] More

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