Central Bank Watch
ECB Makes Changes in Non-Standard Measures but Not Interest Rates
October 6, 2011
In the final ECB Governing Council meeting to be led by the outgoing Jean-Claude Trichet, non-unanimous votes were taken to keep interest rates steady but to add “very important” non-standard measures that will hopefully restore a better transmission of the bank’s interest rate signals. A statement from the council failed to call existing policy “accommodative,” […] More
Central Bank Watch
Bank of England Eases Monetary Policy
October 6, 2011
The Monetary Policy Committee (MPC) didn’t wait for next month’s quarterly inflation report to react to a worsening economic outlook. While keeping the Bank Rate steady at its historic low of 0.5% (the level since March 2009), the MPC voted to enlarge the size of the asset purchase program by GBP 75 billion to GBP […] More
New Overnight Developments Abroad - Daily Update
Share Prices Up Ahead of ECB Press Conference
October 6, 2011
The dollar dropped 0.8% and 0.6% overnight against the Australian and New Zealand currencies. The greenback also lost 0.3% against the yen, 0.2% versus sterling and 0.1% relative to the euro. The Canadian dollar, Swiss franc and Chinese yuan are unchanged. With China still closed, share prices in the Pacific Rim advanced 4.6% in Indonesia, […] More
Central Bank Watch
ECB Preview
October 5, 2011
ECB President Trichet’s last monthly conference after eight years at the helm comes at a time of great controversy for the common currency area and the ECB. Economic growth has stalled abruptly. Between March and September, the manufacturing purchasing managers index swung from a robust 57.5 to a contractionary reading of 48.5. That deterioration was […] More
Central Bank Watch
Polish Monetary Reference Rate Left Unchanged as Expected
October 5, 2011
The Narodowy Bank’s key 4.5% interest rate was not changed after this month’s policy meeting. Increases of 25 basis points each were implemented earlier this year in January, April, May and June. 4.5% in the reference rate compares to a pre-recession crest of 6.0% from June to November of 2008. Six ensuing cuts reduced such […] More
Deeper Analysis
U.S. Activity Still Increasing as Ezone PMI Readings Drop Below 50
October 5, 2011
Economic conditions have deteriorated much faster in the euro area than the United States according to September purchasing manager survey results. Readings above 50 imply expansion, while those below 50 signify contracting activity. As scores move further from 50, the rate of change or second derivative becomes more pronounced. A drop in the U.S. services […] More
New Overnight Developments Abroad - Daily Update
Soft Data Out of Europe and a Downgrade of Italy’s Credit Rating
October 5, 2011
The dollar is somewhat weaker, with declines of 0.4% against the kiwi, 0.3% versus the Aussie dollar, 0.2% relative to the yen and loonie, and 0.1% against the euro. The greenback is 0.2% firmer against the Swiss franc and up 0.1% relative to sterling. The yuan is unchanged. Equities fell 2.3% in South Korea, 0.9% […] More
Central Bank Watch
Bank of England Preview
October 4, 2011
The Bank of England’s Monetary Policy Committee will reveal this month’s policy settings at 11:00 GMT on Thursday. In September, the vote to retain a 0.5% Bank Rate was unanimous (9-0) for the first time in a year, and Adam Posen continued to dissent unilaterally in favor of resuming quantitative easing. Analysts have increasingly framed […] More
Central Bank Watch
Bernanke
October 4, 2011
In testifying today before the Joint Economic Committee, the Fed Chairman made predictable remarks, indicating that the central bank has not exhausted possible steps to support the U.S. economy but stressing that fiscal policy and other actions for which the Congress is responsible are more appropriate and effective avenues to be pursued. Nor was the […] More
Central Bank Watch
Reserve Bank of Australia Flags New Risk of a Rate Reduction
October 4, 2011
The Reserve Bank of Australia’s Policy Board meets monthly except in January. Policy had a tightening bias since the autumn of 2009. After the September 6th meeting this year, officials had reaffirmed that “growth is still likely to be at trend or higher” and reminded investors that “the Board remains concerned about the medium-term outlook […] More
