New Overnight Developments Abroad - Daily Update

Back and Fill

September 27, 2022

Today has been a day for counter-trend financial market movements. The dollar and sovereign debt yields are down. Stocks and commodities have rallied. The dollar has fallen 0.6% against the Swiss franc, 0.4% versus the euro and in weighted terms, 0.3% relative to the yen, and 0.2% against sterling. Bitcoin jumped 5.2% overnight, while prices […] Read Article

Foreign Exchange Insights and Next Week

Next Week’s Menu: September 24 -30, 2022

September 23, 2022

Central Banks: Monetary policies will be reviewed in India, Mexico, the Czech Republic, Thailand and Hungary. The Bank of Japan publishes minutes of its Board meeting and also its quarterly Tankan survey of corporate conditions and expectations. Many Fed officials have public speaking engagements including Chairman Powell. ECB President Lagarde and Bank of Japan Governor […] Read Article

Central Bank Watch

Nigerian Policy Rate Increase Also Greater than One Percentage Point

September 27, 2022

The policy interest rate of the Central Bank of Nigeria was hiked by 150 basis points to 15.5%, the highest level in over a decade and a half. The rate had been reduced by 200 basis points in 2020. Three increases this year since May total 400 basis points. CPI inflation of 20.5% last month […] Read Article

Deeper Analysis

Rundown of Tuesday U.S. Data Releases

September 27, 2022

Home price inflation decelerated in July to a 15-month low of 16.1% according to the Case-Shiller index and to a 17-month low of 13.9% meaured by the FHFA index. The Dallas Fed manufacturing survey index weakened 4.3 points to a 2-month low of -17.2 in September, but the Richmond Fed manufacturing index recovered eight index […] Read Article

Central Bank Watch

125-Basis Point Hungarian Base Rate Hike Exceeds Expectations

September 27, 2022

Hungary’s central bank base rate has been raised by a further 125 basis points to 13.0%. Although greater than analysts were anticipating, the increase didn’t keep pace with the 1.9 percentage point acceleration of Hungarian CPI inflation to 15.6% in August from 13.7% in July and 4.9% in August 2021. The base rate had been […] More

New Overnight Developments Abroad - Daily Update

Record Low in Sterling and Other Financial Market Extremes

September 26, 2022

The British pound plunged overnight to an intra-day and all-time low of $1.0327. That’s down 25% from a 52-week high on October 20, 2021 and below the previous record low of $1.0345 in early 1985. Back then in an all-out fight to avoid the humiliation of sterling dropping below dollar parity, the Bank of England […] More

New Overnight Developments Abroad - Daily Update

Investors Selling Just About Everything for Dollars

September 23, 2022

The weighted DXY dollar index rose 0.8% overnight and is trading currently near its intra-day level. At that high, DXY was a mere 5.5% below its peak going back to 1985 and 55.5% above its 2008 low. The dollar shows overnight gains of 1.8% against sterling, 1.1% versus the New Zealand dollar, 1.0% relative to […] More

Central Bank Watch

Bank of England Policymakers Disagree Over Future Inflation and How Much to Tighten

September 22, 2022

The Bank of England‘s policy meeting must have had a lively discussion. Only five of the nine members of the Monetary Policy Committee agreed with the 50-basis point size of today’s base rate hike. Three want a hike of 75 basis points, which is what street analysts were anticipating, but one member voted to raise […] More

Central Bank Watch

Bigger Than Forecast Swiss Central Bank Interest Rate Hike

September 22, 2022

In raising Switzerland’s policy interest rate by a record 75 basis points to 0.50%, Swiss National Bank officials ended a period of negative interest rates stretching back to January 2015. Policy at the SNB is reviewed quarterly, and an initial 50-basis point hike was engineered at the prior meeting. More restraint seems likely: SNB President […] More

Central Bank Watch

Down the Rabbit Hole of Turkish Monetary Policy

September 22, 2022

While most countries seems to be running away from inflation, Turkey seemingly is taking steps to bring it on. Turkish CPI inflation has accelerated to 80.2% versus a target of 5%, and the lira had collapsed 45% since September 2021. From 19%, the rate was lowered to 14.0% in the final four months of 2021, […] More

Central Bank Watch

Central Bank Rate Hike in Norway

September 22, 2022

The Bank of Norway‘s policy interest rate was lifted by 50 basis points today and becomes 2.25%. In six moves over the past year, the rate has risen from zero percent. Guidance suggests that there likely will be a further increase at the next meeting in November. Since officials see some evidence that monetary tightening […] More

Central Bank Watch

Japan Wields the Intervention Tool but Doubles Down on Continuing Ultra-Loose Domestic Monetary Policy

September 22, 2022

After numerous rhetorical complaints by officials about the weakness of the yen, Japanese officials sold foreign currency directly in the market to support their currency, which yanked the currency from an overnight low of 145.9 per dollar to as high as 140.35. This was only the third intervention episode in the past three decades. The […] More

Central Bank Watch

Rate Hikes Today in Taiwan, Hong Kong, Macau, Vietnam, Indonesia and the Philippines

September 22, 2022

The discount rate at the Central Bank of the Republic of China (Taiwan) has been raised 12.5 basis points to 1.625%. That increase follows two earlier hikes this year totaling 37.5 basis points. Inflation slipped in August to 2.66% but is still above target. Growth remains positive. A bigger full percentage point hike of the […] More

New Overnight Developments Abroad - Daily Update

Thursday Central Bank Derby Results in Japanese Forex Intervention, Many Interest Rate Hikes, and One Bizarre Cut

September 22, 2022

Net overnight movements in the dollar have ranged widely from a 1.8% plunge against the yen to a 1.1% rise versus the Swiss franc. In between, the dollar fell 0.3% versus the euro, Australian dollar, and sterling. After numerous rhetorical complaints by officials about the weakness of the yen, Japanese officials sold foreign currency directly […] More

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