Archive for July 2009

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Concern Over European Banks

July 29, 2009

Chinese stocks, down 5.3%, posted their sharpest daily drop in eight months.  Elsewhere in the Pacific Rim, equities fell by 2.4% in Hong Kong, 1.3% in Indonesia, 1.1% in Vietnam, 0.7% in Malaysia where Bank Negara is expected to leave the benchmark interest rate at 2%, 2.1% in Pakistan, 0.9% in New Zealand, and 0.6% […] More

Currency Markets in the News

The Consumer's Burden

July 28, 2009

Not long ago, house price stability was widely considered the main condition to end the U.S. recession on a sustaining basis.  Today’s drop in equities suggests that stable house prices are no longer a sufficient or even the most important developments that is required.  Today’s Case-Shiller report reflected much more improvement than anticipated.  The composite […] More

Central Bank Watch

Monetary Policy Kept Unchanged in India

July 28, 2009

The Reserve Bank of India left its key repo and reverse repo rates at 4.75% and 3.25% and its cash reserve requirement at 5%.  The result matched expectations and was accompanied by a statement that placed an upward bias on the Bank’s growth forecasted and revised projected inflation in fiscal 2009-10 to 5% from 4%.  […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Softer Dollar

July 28, 2009

The dollar lost 1.2% against the Australian dollar, 0.8% against the kiwi, 0.6% relative to the yen, 0.4% versus the Canadian dollar, 0.3% against the euro and Swiss franc and 0.2% relative to sterling. The Nikkei closed unchanged.  Elsewhere in Asia, stocks rose 1.8% in Singapore and Hong Kong, 1.6% in Taiwan, 1.3% in Indonesia, […] More

Bonds and Stocks

Interest Rates and Inflation

July 27, 2009

Figures in the table below are expressed in basis points expect for the latest ten-year bond yields and the latest on-year CPI inflation rates.  Entries in the fourth, fifth, sixth and seventh rows are the respective changes of latest bond yield quotes from their averages so far this month, their average values in the first […] More

Central Bank Watch

Bank of Israel Ends Bond Buying

July 27, 2009

The Bank of Israel ended daily secondary market purchases of bonds but retained an ultra-low 0.5% benchmark interest rate.  Monetary officials reacted to more normal capital market functionality, evidence of higher expected inflation near its upper target and a bigger-than-anticipated June CPI jump of 0.9% and 3.6% year-on-year.  The bond buying plan, which ends on […] More

Central Bank Watch

A 100-Basis Point Rate Cut in Hungary

July 27, 2009

Magyar Nemzeti Bank implemented a rate cut as expected for the first time since January 19th, but its magnitude was twice as much as anticipated.  The 8.5% central bank base rate is now back to its level before a 300-basis point hike last October 22nd, which had been taken in response to a sharply depreciated […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Equities Up in Asia and Europe

July 27, 2009

Typical of reduced risk aversion, the dollar has firmed 0.4% against the yen but dropped 0.8% relative to the Australian dollar, 0.5% against the kiwi, 0.4% against the euro, 0.3% against the Swiss franc, 0.2% against the Canadian dollar and 0.1% versus sterling. Ten-year bund, gilt and JGB yields are up 3 basis points, 2 […] More

Central Bank Watch

Colombian Interbank Rate Held at 4.5%

July 24, 2009

The Bank of the Republic left its key rate unchanged at 4.5%, as officials had hinted a month ago it was likely to do.  Six rate cuts in consecutive months of 50 bps each in January and June sandwiched around four straight declines of 100 bps are expected to provide enough stimulus.  Quarter-on-quarter growth turned […] More

Foreign Exchange Insights and Next Week

Next Week

July 24, 2009

The final week of the July offers a heavy data diet from Japan, Europe, and the United States, Sino talks with Geithner, and speeches from Bernanke, Dudley, and Yellin. At least six central banks have interest rate policy meetings: Hungary, India, Israel, Malaysia, New Zealand and Poland.  No changes are expected in the last four […] More

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