Central Bank Watch
Market Quotes at Previous FOMC Meetings
June 23, 2010
In response to concerns about tighter Chinese policies and Europe’s sovereign debt problems, the global environment looks riskier than when the FOMC last met in late April, and that cloud is reflected in market movements over the past eight weeks. The 10-year Treasury yield declined 63 basis points. The last time when the FOMC met […] More
Central Bank Watch
Icelandic Central Bank Rates Cut 50 Basis Points
June 23, 2010
Sedlabanki has implemented the fourth rate cut of 50 bps this year and the tenth reduction since March 2009. The seven-day lending rate is now 8.0%, 1000 basis points lower than such had been from October 2008 until March 2009 after securing aid from the IMF. The six reductions in 2009 had totaled 800 basis […] More
Central Bank Watch
Czech National Bank Leaves Interest Rates Unchanged
June 23, 2010
As expected and following an unexpected easing on May 7 of 25 basis points, the CNB retained a 0.75% target for its two-week repo, flanked by a discount rate of 0.25% and a Lombard Rate of 1.75%. The vote to ease in May had been split 4-2 and was the first change of any sort […] More
New Overnight Developments Abroad - Daily Update
Bank of England Minutes Contain a Surprise Dissenting Vote
June 23, 2010
The dollar fell 0.7% against sterling and by 0.8% against the kiwi. Other dollar moves were small: up 0.3% against the loonie but down 0.2% against the yen and 0.1% relative to the euro and Aussie dollar. The Swiss franc is steady. So is the yuan after climbing 0.4% on Monday and retreating 0.2% on […] More
Larry's Blog
Gambling on Fiscal Restraint
June 22, 2010
One of the greatest uncertainties faced by policymakers concerns whether economies that are now recovering can tolerate fiscal restraint. Expert opinion is divided on this question, and historical precedents provide conflicting answers. Fiscal cutbacks in 1937 and a VAT increase of two percentage points to 5% in April 1997 respectively pushed the U.S. and Japanese […] More
New Overnight Developments Abroad - Daily Update
Cynicism Over Euro Area Debt and Beijing’s Yuan Policy Sends Stocks Lower
June 22, 2010
Equiites fell by 1.2% in Japan and Australia, 0.7% in India, and 0.5% in South Korea, Singapore, Sri Lanka and New Zealand. Downward pressure intensified in Europe where stocks so far show losses of 1.8% in Madrid, 1.6% in Paris and and London, and 1.0% in Frankfurt. U.S. futures are lower, too. The yuan trimmed […] More
Central Bank Watch
Hungarian Monetary Policy Remains Paused
June 21, 2010
The Magyar Nemzeti Bank did not cut its 5.25% key interest rate for a second straight month, citing perceived risks associated with Hungarian fiscal assets and inflation. A statement from officials projects export-led economic growth with domestic demand lagging. Inflation is presently above target but already had receded to 5.1% in May from 5.9% in […] More
Deeper Analysis
Chinese Yuan Price History
June 21, 2010
The yuan depreciated 82.6% from 1.5 renminbi per dollar in 1980 to 8.62 per dollar in 1994 and had recovered 4.1% by 1997 when it was pegged at 8.277. Note that China’s currency carries two interchangeable names, the renminbi and the yuan. The yuan remained frozen against the dollar through the launch of the euro […] More
New Overnight Developments Abroad - Daily Update
China Unpegs Yuan Against Dollar
June 21, 2010
The yuan is 0.4% firmer against the U.S. currency following Saturday’s announcement by the central bank that “it is desirable to proceed further with reform of the renminbi exchange rate regime and increase the renminbi exchange rate flexibility.” The action was taken one week before a summit of G-20 leaders in Toronto and against the […] More
Foreign Exchange Insights and Next Week
Next Week
June 18, 2010
The new British government presents its austerity budget on Tuesday. Central bank meetings next week in the United States, Hong Kong, Norway, the Czech Republic, Hungary and Taiwan are not likely to result in an interest rate changes. Minutes from the Bank of England meeting earlier this month will be published on Wednesday. At the […] More
