Archive for March 2011

New Overnight Developments Abroad - Daily Update

Lower Share Prices

March 29, 2011

Stocks are down 0.8% in Germany, 0.6% in France, and 0.3% in Britain.  Earlier, equity markets lost 1.0% in China, 0.3% in Indonesia, and 0.2% in Japan but climbed 0.9% in India, 0.8% in South Korea and 0.5% in Australia. The dollar rose 0.3% against the yen and Swiss franc, a sign of greater risk […] More

Central Bank Watch

Israeli Central Bank Interest Rate Lifted by 50 Basis Points

March 28, 2011

The Bank of Israel implemented a third consecutive interest rate hike.  It was the ninth tightening since normalization began in August 2009 and the first one to exceed 25 basis point in size.  A statement published on the Bank of Israel’s web site called monetary policy still expansionary.  CPI inflation now slightly exceeds 4.0% versus […] More

Central Bank Watch

No Change in Hungary’s Monetary Policy

March 28, 2011

Magyar Nemzeti Bank officials decided to keep their base rate at 6.00%.  This is the same action as taken at the February meeting and follows three consecutive hikes of 25 basis points in November, December and January. Hungary was hit by several cost-push shocks, which have lifted CPI inflation to 4.0% or above since October.  […] More

New Overnight Developments Abroad - Daily Update

Focus this Monday on Geopolitics, Not Data

March 28, 2011

Chancellor Merkel of Germany suffered key state election defeats over the weekend.  Key issue was nuclear power. The summit of EU leaders in Brussels failed to finalize an agreement on funding for the European Stability Mechanism.  Such hopes ended when Portugal’s government collapsed. There appears to have been a partial reactor meltdown at Fukushima.  Tepco […] More

Foreign Exchange Insights and Next Week

Next Week

March 25, 2011

Manufacturing purchasing managers surveys for developed and developing economies alike will be released next week.  Interest rate policy meetings are scheduled in Hungary, Romania and Iceland.  A pretty heavy stream of other economic data releases is also on tap. For example, Friday is the U.S. monthly jobs day, and Wednesday and Thursday see the release […] More

Foreign Exchange Insights and Next Week

Carry Trade Beginnings

March 25, 2011

While keeping an eye on a whole smorgasbord of developments — Portugal, Libya, Fukushima reactor #3, Chinese growth, oil prices, and differences in the monetary stances of the ECB, Fed, and Bank of England — the most intriguing storyline just off the press is the reappearance of carry trading.  A column in yesterday’s Financial Times […] More

New Overnight Developments Abroad - Daily Update

Markets Watching Summit of EU Leaders

March 25, 2011

Commodity currencies fell Friday after rising Thursday.  New Zealand, Australian and Canadian dollars are 0.5%, 0.3% and 0.2% lower. A carry trade-friendly environment in which low-yielding currencies fund such positions is taking shape.  The U.S. dollar rose 0.6% against the Swiss franc and 0.4% relative to the yen.  The dollar elsewhere is up 0.1% against […] More

Central Bank Watch

Czech National Bank Leaves Two-Week Repo Rate Unchanged at 0.75% Again

March 24, 2011

The last two-week repo rate change, a 25-basis point reduction in May 2010, culminated 300 basis points of easing in eight moves from August 2008.  According to a statement posted today on the CNB’s website, today’s site drew just a single dissent in favor of a 25-basis point tightening compared to three dissents at the […] More

Central Bank Watch

South Africa Moves Closer to its First Rate Hike

March 24, 2011

The South African Reserve Bank (SARB) left its repo rate unchanged at 5.5% as expected but released a more hawkish statement.  Officials after the prior meeting in January had indicated their expectation of a stable policy stance “for some time.”  No such assurance was made this time.  Instead, the statement today just says a decision […] More

Central Bank Watch

A First Rate Hike for the Philippines

March 24, 2011

Bangko Sentral ng Pilipinas implemented its first rate change since July 2009, lifting its overnight borrowing rate and overnight lending rate by 25 basis points each to 4.25% and 6.25%.  Declaring that the 3-5% inflation target for 2011-12 “could be at risk,” a released statement from the central bank’s Monetary Board called its action a […] More

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