New Overnight Developments Abroad - Daily Update

Stronger Dollar After Another U.S. Gun Massacre

May 25, 2022

The dollar strengthened 0.4% overnight on a weighted basis, rising 0.7% against the euro, 0.6% versus the Australian dollar, 0.4% vis-a-vis the Swiss franc, and 09.3% relative to the Canadian dollar, Russian ruble, Mexican peso and sterling. U.S. stock indices are essentially flat in futures trading, and so is the 10-year U.S. Treasury yield. The […] Read Article

Foreign Exchange Insights and Next Week

Dollar at a Crossroads

May 24, 2022

In contrast to the past year of methodical appreciation, one can conjure up vastly divergent dollar performances over the year ahead. From lows in May 2021 to highs earlier this month, the U.S. currency climbed about 17% in weighted terms, 23.7% against the Japanese yen, 18.5% versus the euro and 17.2% relative to sterling. Many […] Read Article

Central Bank Watch

New Zealand Interest Rate Hike

May 25, 2022

The Reserve Bank of New Zealand’s official cash rate was raised by the expected amount, 50 basis points to 2.0%, but the released statement ramps up the commitment to restoring price stability. The Committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range. Consistent […] Read Article

Deeper Analysis

Comparing the Central Bank Interest Rate Paths of the United States, Brazil, U.K., Iceland,Poland and Czech Republic

May 5, 2022

All six of the central banks in this comparative study had interest rate hikes announced either today or yesterday. In none of the cases was the increase the first one of the current cycles. All these tightening cycles represent responses to accelerating inflation caused in large part by external factors like the pandemic, policy responses […] Read Article

New Overnight Developments Abroad - Daily Update

Equities in Fresh Selling Wave… And Dollar Less Sturdy

May 24, 2022

Stock markets in the Pacific Rim tumbled Tuesday by 2.4% in China, 1.8% in Hong Kong, 1.6% in South Korea, 1.2% in Taiwan, and 0.9% in Japan. The German Dax and Paris Cac have lost 0.7% and 0.8%, and the tech sector is leading a similar drop of key U.S. equity futures. Snap Inc plunged […] More

Central Bank Watch

More Central Bank Rate Hikes in Pakistan, Israel, and Ghana

May 23, 2022

In all of these instances, tightening interest rate cycles inspired by accelerating inflation had begun prior to today’s moves. There have been five increases of the State Bank of Pakistan‘s policy interest rate since September 2021, when the rate was raised 25 basis points from 7.0% to 7.25%. hikes followed of 150 basis points in […] More

New Overnight Developments Abroad - Daily Update

Dollar Drops about 1%

May 23, 2022

The U.S. dollar opened this fourth week of May on a down note, falling 1.1% against the euro, 1.5% and 1.2% versus the New Zealand and Australian dollars, 0.9% relative to sterling, 0.5% against the loonie, 0.3% vis-a-vis the Japanese yen and Mexican peso, 0.8% versus the Turkish lira and 6.4% against the Russian ruble. […] More

Foreign Exchange Insights and Next Week

Next Week’s Menu: May 22 – 27, 2022

May 20, 2022

Central Banks: Monetary policy reviews are scheduled next week in South Korea, Turkey, New Zealand and Indonesia. Minutes of the FOMC’s last meeting will be published. Bank of Japan Governor Kuroda and Reserve Bank of Australia Assistant Governor Kent will be speaking publicly during the period. Holiday and Special Events: Victoria Day in Canada falls […] More

New Overnight Developments Abroad - Daily Update

Rising Inflation Dampening the Mood of Consumers Around the World

May 20, 2022

Amid bear markets, investors periodically test the waters in search of good values. Today has been one such day. The week will end with huge net share price declines, but on this Friday equities closed up 3.0% in Hong Kong, 2.9% in India, 1.8% in South Korea, 1.6% in China and Singapore, 1.4% in Indonesia […] More

Central Bank Watch

South African Reserve Bank Interest Rate Hiked 50 Basis Points after 4-1 Vote

May 19, 2022

With one dissent favoring a 25-basis point increment, South Africa’s Monetary Policy Committee agreed to increase its interest rate to 4.75%. This new level is 125 basis points above the pandemic low of 3.5% prevailing from July 2020 until November 2021 but 175 basis points below the pre-pandemic level of 6.5%. A released statement lays […] More

Central Bank Watch

Central Bank of Sri Lanka

May 19, 2022

The Central Bank of Sri Lanka Board had agreed to a shock and awe 700-basis point interest rate hike at their policy review in April and consequently decided this month to leave the standing deposit facility rate unchanged at 13.5%. “The Board was of the view that the policy measures that have already been implemented […] More

Central Bank Watch

First Filipino Interest Rate Hike Since November 2018

May 19, 2022

At the Central Bank of The Philippines, the overnight interest rate was lifted 25 basis points to 2.25% today. This was the first increase since November 2018 but leaves the rate level 175 basis points under its pre-pandemic level of 4.0%. Filipino CPI inflation rose from 3.0% in January and February to a 40-month high […] More

New Overnight Developments Abroad - Daily Update

Nothing but Red on the Screens

May 19, 2022

It’s no longer about the data, or the news for that matter. A self-perpetuating technically-driven downward dynamic has taken over financial markets. For the Nasdaq, the bear market threshold was breached a while ago. S&P futures are within a percent of bear market territory, and its only a matter of time before the Dow joins […] More

New Overnight Developments Abroad - Daily Update

Risk Aversion Returns

May 18, 2022

It’s not surprising that the investor move back into riskier assets over the prior three sessions proved to be short-lived because the reasons behind this year slide in equities and rise of the dollar hadn’t disappeared. The three main U.S. stock market indices are down 0.5-1.0% in futures trading. Smaller dips have occurred in Europe. […] More

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