New Overnight Developments Abroad - Daily Update
China Gets a Third Interest Rate Hike
February 8, 2011
After an uneventful Monday, markets finally have some important news: The Peoples Bank of China announced hikes of 25 basis points each in the one-year lending rate to 6.06% and in the one-year deposit rate to 3.0%. Earlier increases of similar size were announced last October 19 and December 25. Today’s decision was made as […] More
New Overnight Developments Abroad - Daily Update
It’s Okay to Carry Risk
February 7, 2011
Monday markets have been calm and in a hopeful mood about such dangers as the European debt negotiations, the Egyptian situation, and the resistance of general inflation against commodity price pressures. At 16:00 GMT, stocks show mostly decent gains, the dollar is modestly higher, and oil prices have been low. Today’s data calendar was thin […] More
Foreign Exchange Insights and Next Week
Next Week
February 4, 2011
The week of February 11 has an abundance of second-tier data releases. China will remain closed on Monday and Tuesday for continuing observance of the Lunar New Year, and Japan is shut Friday for National Foundation Day. Fed Chairman Bernanke on Wednesday will be testifying before the House budget committee on the economic outlook, monetary […] More
Foreign Exchange Insights and Next Week
Times Are a Changing
February 4, 2011
Context is very important in foreign exchange trading. The December U.S. jobs report released on January 7 and today’s January labor market report both surprised markets in pretty much the same way. The unusual combination of weaker-than-needed jobs growth yet a big drop in the unemployment rate triggered a weaker dollar a month ago but […] More
Central Bank Watch
Rate Hike in Indonesia
February 4, 2011
Bank Indonesia became one of the last Asian central banks to begin raising interest rates today with a hike of 25 basis points in its benchmark to 6.75%. The move is being characterized as a preemptive step to curb the renewed onset of rising inflation expectations. Due mostly to food price pressures, CPI inflation has […] More
New Overnight Developments Abroad - Daily Update
Awaiting U.S. Jobs Data, Events in Egypt, and EU Summit Results
February 4, 2011
Currencies barely moved overnight, continuing the flat performance in U.S. trading on Thursday. The dollar is up by 0.2% against the Swiss franc and 0.1% versus sterling, unchanged against the yen, euro, kiwi and yuan, down 0.1% relative to the Canadian dollar, and off 0.2% against the Australian dollar. Many Asian markets remain closed for […] More
Central Bank Watch
A Closer Vote on Czech Central Bank Rate
February 3, 2011
Monetary officials at the Czech National Bank kept the two-week repo rate steady at 0.75%, which had been the universally expected outcome, and released a statement that does not imply a tightening before late 2011. However, the vote for unchanged policy was razor-thin at 4-3, with three dissents in favor a rate hike of 25 […] More
Central Bank Watch
No Change Made in Romanian Monetary Policy
February 3, 2011
The National Bank of Romania left its monetary policy rate unchanged at 6.25%, its level since a 25-basis point cut last May 4th. There were five rate cuts from February 2009 to September 2009 totaling 225 basis points followed by a further 175 basis points of rate reduction in four increments last year. The central […] More
Deeper Analysis
PMIs Show Largest U.S. Edge Against Euroland in at Least Two Years
February 3, 2011
In contrast to the view of sluggish growth among advanced economies, the United States and Euroland reported strong manufacturing and non-manufacturing purchasing manager survey results for January. A score of 50 is neutral. Above that level connotes expanding activity in these diffusion indices, and results below 50 signify contraction. Back in April 2009, none of […] More
Central Bank Watch
ECB Watching Inflation Closely
February 3, 2011
As expected, the ECB kept its key interest rates — a 1.0% refinancing rate flanked by a 0.25% deposit rate and 1.75% on the marginal lending rate — unchanged and declared such to be still accommodative yet appropriate. The views remain intact of positive underlying growth ahead, above-target inflation in the near term due to commodity […] More
