Central Bank Watch
Central Bank of Brazil Implements Second Rate Cut Since End-August
October 19, 2011
Although expected, a second 50-basis point rate cut to 11.5% is not without controversy because inflation and credit growth now exceed their targets, expected inflation is climbing, and the labor market is comparatively tight. Consumer prices rose 7.3% in the year to September versus a target range of 2.5 – 6.5%. Credit and lending are […] More
Central Bank Watch
Norwegian Policy Rate Left at 2.25%
October 19, 2011
For the fourth straight time and as expected, the Norges Bank Executive Board left its policy interest rate at 2.25%. Moreover, the policy bias was changed from tightening to neutral. In June, officials had projected a likely rate range until October of 2.25-3.25%, but today’s statement identified the likely range between now and March 2012 […] More
Central Bank Watch
Thai Monetary Tightening on Hold
October 19, 2011
The Bank of Thailand had previously raised its policy interest rate by 25 basis points each in July 2010, August 2010, December 2010, January 2011, March 2011, April 2011, June 2011, July 2011, and August 2011. The rate altogether increased from 1.25% to 3.5% between mid-2010 and August 2011. But for the first time in […] More
New Overnight Developments Abroad - Daily Update
Hope Ahead of EU Summit
October 19, 2011
Despite a two-notch downgrade of Moody’s Spanish sovereign debt rating to A1 from Aa2 and a workers strike in Greece, markets today have shown more hope than despair. Several key U.S. economic indicators will be released later, with a potential to change that optimism. The euro hit an overnight high of $1.3870 and is currently […] More
Deeper Analysis
U.S. Tuesday Data Highlights
October 18, 2011
A greater-than-assumed 2.3% leap in producer energy prices spearheaded last month’s 0.8% rise of the overall PPI index and lifted on-year energy price inflation to 18.4% from 15.9% in the year to August. Core producer price inflation is in the Goldilocks zone. A monthly gain of 0.2% after 0.1% in August isn’t excessive, but by […] More
New Overnight Developments Abroad - Daily Update
More Bad News for Europe
October 18, 2011
The ZEW Institute released its October figures for Investor expectations toward Germany and Europe and suggested that Germany already may be in technical recession. The data were much worse than anticipated. For Germany, the expectations index worsened five points to minus 48.3, the lowest level since November 2008. Such had been at +3.1 in May. […] More
Larry's Blog
Weekend Musings
October 17, 2011
The motto of European debt crisis negotiators seems to be, “why do today what can be put off until tomorrow?” For two years, hard deadlines have come and gone with officials making minimalist concessions and then only when threatened with dire market consequences. Some pundits are starting to suggest that it may be worth it […] More
New Overnight Developments Abroad - Daily Update
Pivotal Week Ahead for the EU Crisis
October 17, 2011
Amid mixed signals on resolving the EU debt crisis, investors are clinging to hope. Equities and commodities are higher, but the euro has softened. The G20 wants a resolution by October 23rd. The plan is expected to include a 50% haircut for bondholders, which major European banks are resisting, aid to Greece, a levered ESEF, […] More
Central Bank Watch
Bank of Mexico’s Benchmark Rate Stays at Cyclical Low of 4.5%
October 14, 2011
The Bank of Mexico’s key interest rate was slashed during the Great Recession from 8.25% to 4.5% and has remained at that low since July 2009. A statement on the central bank’s web site notes that global economic prospects have darkened and revises Mexico’s outlook for growth downward, while keeping such positive. Aside from a […] More
Foreign Exchange Insights and Next Week
Next Week
October 14, 2011
G20 finance ministers will be meeting October 15 in Paris. Central bank interest rate meetings are scheduled in Turkey, Norway, Brazil and The Philippines. The Reserve Bank of Australia and Bank of England will publish minutes from policy meetings held early this month. Scheduled U.S. data releases feature the Beige Book, industrial production, consumer and […] More
