New Overnight Developments Abroad - Daily Update

Weak European Data, Fizzled Oil Price Rally, and an Unexpected Australian Central Bank Rate Hike

June 6, 2023

Concerns about a global demand slowdown depressed the dollar, equities, and the prices of crypto and oil this Tuesday. The dollar fell 1.0% against the Aussie dollar, 0.6% versus the euro and yen, and 0.3% relative to sterling. An exception was the Turkish lira against which the dollar advanced by a further 1.2% overnight. Share […] Read Article

Foreign Exchange Insights and Next Week

Next Week’s Menu: May 27 – June 2, 2023

May 26, 2023

Central Banks: Monetary policies to be reviewed in Thailand and Kyrgyzstan. Federal Reserve Beige Book of regional economic conditions and minutes from last European Central Bank governing council meeting to be published. Bowman and Jefferson from the Fed and ECB President Lagarde speak publicly during the week. Events and Holidays: Turkey’s runoff presidential election happens […] Read Article

Central Bank Watch

Another Australian Central Bank Rate Hike, and This One Was Not Anticipated

June 6, 2023

With Australian consumer price inflation receding to 7.0% last quarter from 7.8% in the final quadrant of 2022, analysts were expecting officials at the Reserve Bank of Australia to leave the Official Cash Rate steady at 3.85%. Instead, such was raised for the twelfth time since May 2022. This was the seventh 25-basis point increase […] Read Article

Deeper Analysis

FOMC Statement and Press Conference

May 3, 2023

Statement: As markets were expecting, the federal funds target was increased by 25 basis points to 5.0-5.25%. The new target ceiling for the first time matches the level existing when the sub-prime mortgage credit crisis first surfaced in the summer of 2007. The statement justifying today’s action makes only a few modifications from the prior […] Read Article

New Overnight Developments Abroad - Daily Update

Price of Oil Back in the Spotlight

June 5, 2023

At the weekend’s meeting of OPEC plus oil ministers, Saudi Arabia announced a further production cut of one million barrels barrels per day, effective July 1, and WTI oil is trading 2.6% higher as a result although about $1.5 below today’s earlier peak. The dollar has opened the week on an up beat, with gains […] More

New Overnight Developments Abroad - Daily Update

Market Reaction to U.S. Debt Ceiling Vote Muted Ahead of Payroll Data Release

June 2, 2023

U.S. share price futures are up 0.6% from Thursday’s close. The weighted DXY dollar index has dipped 0.1%, and the 10-year U.S. Treasury yield is a basis point higher. Prices for oil and Bitcoin are up 1.6% and 1.1%, but that for gold is unchanged. More volatility has been seen in foreign stock markets, featuring […] More

New Overnight Developments Abroad - Daily Update

Indications that a Debt Ceiling Deal Will Be Reached in Time

May 26, 2023

While no deal has been attained yet  to raise the U.S. debt ceiling, both sides of the discussions are expressing optimism, and investors are anticipating that the U.S. will not default. That’s why equities are higher, but the 10-year U.S. Treasury yield is also up two basis points to an 11-week high after the release […] More

Central Bank Watch

South African Reserve Bank Interest Rate Hike Exceeds Expectations

May 25, 2023

An interest rate increase of 50 basis points to 8.25% decided unanimously today matched the prior hike in March and is the tenth increase since the rate was raised from a pandemic low of 3.50% to 3.75% in November 2021. CPI inflation of 6.8% in April exceeded the 3-6% target range ceiling, and indicators of […] More

New Overnight Developments Abroad - Daily Update

German Recession Confirmed and Interest Rate Decisions in South Korea, Turkey and Indonesia

May 25, 2023

U.S. GDP data will be released shortly. In the meantime, German GDP growth last quarter was revised to -0.3% (not annualized) from zero percent reported originally. That’s the second negative quarter in a row and the third drop in the past four quarter, resulting in a negative year-on-year growth rate of -0.5% as well. The […] More

Central Bank Watch

FOMC Minutes from the May 2-3 Meeting

May 24, 2023

The FOMC minutes, published this afternoon, reveal frustration that inflation continues to recede more slowly, pushes back against any consideration of a rate cut in 2023 or indication that the rate under no circumstances would be raised further in the second half of 2023. The mantra is that policy will be data driven, leaving most […] More

Central Bank Watch

Central Bank Rate Hikes in Iceland and New Zealand

May 24, 2023

Iceland’s 7-day term deposit rate was lifted 125 basis points to 8.75%. Such had been as  low as 0.75% prior to May 2021, 2.0% at the beginning of 2022, and 6.0% when 2023 started. With CPI inflation edged up to 9.9% and measures of long-term expected inflation also creeping higher, the statement released in conjunction […] More

New Overnight Developments Abroad - Daily Update

More Pessimism

May 24, 2023

The possibility of a U.S. debt default next month persists. Central Bank interest rates were raised today by 125 basis points in Iceland, 50 bps in Nigeria, and 25 bps  in New Zealand. Europe’s largest economy has “suffered a setback” according to the May German business climate index compiled by the IFO Institute. Inflation according […] More

New Overnight Developments Abroad - Daily Update

Some Reasonably Good Data Reports But Debt Ceiling Countdown Rumbling On

May 23, 2023

Preliminary purchasing managers surveys for May reported this Tuesday all exceeded the 50 level that separates activity that is expanding from activity that is contracting. The S&P Global U.S. composite PMI reading rose 1.1 points to a 13-month high of 54.5, but the gulf between services (a 13-month high of 55.1) and manufacturing (a 3-month […] More

New Overnight Developments Abroad - Daily Update

U.S. Debt Ceiling Standoff Into the Eleventh Hour

May 22, 2023

Without a higher debt ceiling, the U.S. federal government will begin to not meet all its spending obligations by the start of June, prompting a default by mid-month, if not somewhat sooner. Biden and McCarthy are to resume talks to avert such a crisis today. Fed Chairman Powell again insinuated that banking system strains could […] More

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