Deeper Analysis
Ten-Year Sovereign Debt Yields: a Tale of Contrasts
August 4, 2011
Ten-year bond yields in Euroland members with troubled fiscal situations remain in the stratosphere. The ECB was compelled to resume bond buying today in light of premiums versus German bunds that yesterday stretched to more than 1200 basis points in Greece’s, above 900 bps for Portugal, over 800 bps in Ireland, and nearly 400 bps […] More
Central Bank Watch
Czech National Bank 2-Week Repo Rate Left at Cyclical Low of 0.75%
August 4, 2011
The fifth of eight scheduled Policy Board meetings in 2011 did not result in an interest rate change, which was the outcome predicted by analysts. Like the prior two meetings on May 5 and June 23, two of seven policymakers preferred to raise the key rate by 25 basis points. However, the five-person majority seems […] More
Central Bank Watch
ECB Press Conference and Decision
August 4, 2011
The Governing Council of the European Central Bank upgraded the degree of uncertainty in the outlook to “particularly high” from “high.” Uncertainty complicates the segregation of the basic monetary policy of lessening accommodation from the use of non-standard liquidity infusions to ensure better monetary transmission of its policy. With greater urgency than before, President Trichet […] More
Central Bank Watch
Japanese Monetary Accommodation Enhanced
August 4, 2011
After an abbreviated two hour 40 minute Policy Board meeting that had been scheduled initially to extend to two days of discussions, the nine-person committee agreed unanimously to 1) retain a zero to 0.1% overnight money rate target range, 2) increase its asset purchases by JPY 5 trillion to JPY 15 trillion (this program was […] More
Central Bank Watch
No Policy Change at the Bank of England
August 4, 2011
As is its preference when not changing policy settings, the Bank of England Monetary Policy Committee released a statement that only gives the bare facts. The Bank Rate stays at 0.5%, its level since March 2009. The limit of GBP 200 billion on the asset purchase plan, which was last raised in November 2009 and […] More
Central Bank Watch
Turkish Monetary Policy Eased
August 4, 2011
Turkish monetary policy had been tightened in late 2010 and early this year via a mix of higher reserve requirements and a wider spread between the overnight borrowing and lending rates. After the prior policy meeting at the Central Bank of the Republic of Turkey on July 21, officials warned that policy may have to […] More
Central Bank Watch
Russian Monetary Policy Left Unchanged
August 4, 2011
Bank Rossii kept its refinancing rate and deposit rates steady at 8.25% and 3.5%, respectively, today. After the last meeting a month ago, there had been some speculation that officials might tighten further, but global circumstances are too precarious now. The refinancing rate was reduced by 525 basis points in 2009-10, the last move being […] More
New Overnight Developments Abroad - Daily Update
Japan Intervenes Heavily and Increases Quantitative Easing
August 4, 2011
There has been massive intervention by Japan’s Ministry of Finance applied constantly. The dollar leaped 3.8% against the yen, getting as high as 80.25 versus a low of 76.76 yesterday. A 2-day scheduled Bank of Japan Policy Board meeting was compressed to a single day, so that the announcement of extra quantitative easing could be […] More
