New Overnight Developments Abroad - Daily Update

Investors Treading Water Ahead of U.S. Monthly Release of Jobs Data

August 5, 2022

Market movements: U.S. stock futures and the dollar are barely changed.¬† Likewise, the prices of gold and West Texas Intermediate crude oil have dipped just 0.2% and 0.3%, although the latter has now retreated roughly 29% from its 52-week high set in early March. Bitcoin rallied 3.4%. The Reserve Bank of India engineered a third […] Read Article

Foreign Exchange Insights and Next Week

Next Week’s Menu: August 6 – 12, 2022

August 6, 2022

Central Banks: Monetary policy reviews are scheduled in Peru, Sebia, Thailand and Mexico. Japanese Holiday: Mountain Day on Thursday. Scheduled U.S. Economic Data Releases: Quarterly productivity and unit labor costs. Monthly CPI, PPI, import prices, Fiscal budget deficit, small business sentiment, IBD/TIPP optimism index, and U. Michigan August index of consumer confidence. Weekly chain store […] Read Article

Central Bank Watch

Reserve Bank of India Raises Interest Rate

August 5, 2022

The Reserve Bank of India engineered a third hike of its policy interest rate, lifting such by 50 basis points to 5.40%. This matched June’s incremental rise, which had followed an initial 40-basis point increase in May. The rate is now at its highest level since September 2019. A released statement explained today’s move: With […] Read Article

Deeper Analysis

July 2022 in Figures

July 30, 2022

July was another active month for central banks in the face of high inflation, and investors almost assuredly moved wealth back into riskier assets to a greater extent than monetary officials would like to have seen. June ended just two weeks after the Federal Reserve’s greater-than-predicted initial 75-basis point interest rate hike, and by end-July […] Read Article

Central Bank Watch

British Interest Rate Hike

August 4, 2022

The Bank of England’s 50-basis point interest rate hike to 1.75% also matched expectations, but the decision was not a unanimous one. Committee member Tenreyro preferred an increase of 25 basis points, the size of the previous four increases done in February, March, May and June. The Bank of England’s initial rate hike last December […] More

New Overnight Developments Abroad - Daily Update

Marking Time Ahead of Friday’s U.S. Employment Situation Report… Bank of England Projects Recession

August 4, 2022

The dollar edged 0.1% lower against the euro, Swiss franc, and on a weighted DXY basis. The dollar also fell 0.5% versus the New Zealand dollar and 0.3% relative to the Australian dollar. There was no net dollar movement overnight versus the Japanese yen, Chinese yuan or Canadian dollar. The weakest major currency has been […] More

Central Bank Watch

Brazil’s Selic Interest Rate Hiked 50 Basis Points to 13.75%

August 3, 2022

The monetary policy committee at the Central Bank of Brazil, known as Copom, today implemented its twelfth interest rate hike since March 2021. After cutting the rate by 250 basis points during 2020, the rate level when normalization began was 2.0%. Seven increases during 2021 had totaled 725 basis points, and today’s move was the […] More

New Overnight Developments Abroad - Daily Update

Taking Stock of the Mixed Signals of Recent Developments

August 3, 2022

Investors breathed a sigh of relief that the Pelosi visit to Taiwan is over but continue to worry that adverse geopolitical repercussions will outweigh any symbolic benefits. In its present fragmented political conditions, America could do without the trio of elevated tensions with Russia, China, and the Middle East. Yesterday’s primary U.S. elections demonstrated the […] More

Central Bank Watch

August 2, 2022

The Reserve Bank of Australia‘s Officials Cash Rate¬† was raised to 1.85% from 1.35%. This was the third straight monthly hike of half a percentage point. An initial 15-basis point move from the record low of 0.10% was done in May. A released statement predicts a further rise in Australian CPI inflation to 7.75% this […] More

Central Bank Watch

Armenian Interest Rate Hike to 9.5%

August 2, 2022

The Central Bank of Armenia had cut its refinancing rate in 2020 to a 10-year low of 4.5%. Increases from May 2021 had totaled 325 basis points by the end of that year and have been followed three more moves so far in 2022: 25 basis points in February, 125 bps in March and 50 […] More

New Overnight Developments Abroad - Daily Update

A Chinese Cloud Moves Through Financial Markets

August 2, 2022

The game of chicken between House Speaker Pelosi and Chinese President Xi has generated a new run by investors into safer assets. Pelosi appears determined to not scrap her Asian trip stop in Taiwan, and Xi is warning of unspecified reprisals. In overnight market action, share prices closed down 2.4% in Hong Kong, 2.3% in […] More

New Overnight Developments Abroad - Daily Update

August Kicks Off With Signs of a Global Slowdown and a Further Drop in the Dollar

August 1, 2022

The dollar fell overnight by a further 0.5% on a weighted basis and is 3.6% below last month’s multi-decade high. Dollar losses so far this Monday amount to 2.0% against the kiwi, 1.0% versus the yen, 0.7% relative to the Australian dollar, 0.6% vis-a-vis sterling, 0.4% against the euro and peso, and 0.2% versus the […] More

Foreign Exchange Insights and Next Week

Next Week’s Menu: July 30 – August 5, 2022

July 29, 2022

Central Banks: Monetary policy reviews in the Czech Republic, Australia, U.K., Brazil, India and Georgia. Bank of England Governor Bailey and Reserve Bank of Australia Governor Lowe speak publicly. The quarterly RBA Monetary Policy Statement and Band of England Monetary Policy Report will be published. Monday Holidays: Bank holiday in Australia, Civic Holiday in Canada, […] More

New Overnight Developments Abroad - Daily Update

End-Month Data Storm

July 29, 2022

The last business day of each month tends to experience a load of economic data reports, and July has been no exception. A market misconception caused by a policy dynamic fraught with uncertainty that translates into lessening transparency about future policy has complicated the task of reducing inflation. I personally did not think that Powell’s […] More

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