Central Bank Watch
Sri Lankan Repo Rate Held Steady at 7.0% Despite Lower Inflation
November 16, 2011
Sri Lankan inflation dropped to 5.1% in October from 6.4% in September and a peak in mid-2008 of 28.2%. Nonetheless, officials at the Central Bank of Sri Lanka voted to retain a 7.0% repo rate and an 8% reserve requirement after discussing the merits of easing. The repo rate was last cut in January 2011 […] More
New Overnight Developments Abroad - Daily Update
A Foul Mood to Start the Final Eighth of 2011
November 16, 2011
Investors continue to view European prospects very dimly and to opt for low-risk assets. This helped the dollar, yen and Japanese bonds but hurt stocks and commodities. The ECB via the SMP program has reportedly been buying Italian and other troubled debt, but monetary officials continue to oppose expressing a readiness to engaged in “unlimited” […] More
Central Bank Watch
Chilean Benchmark Central Bank Rate Kept at 5.25%
November 15, 2011
The Central Bank of Chile is better positioned than most central banks to handle a new downturn in global activity should the euro debt crisis evolve into such. That is because Chile’s central bank raised the key interest rate by 475 basis points from 0.5% prior to June 2010 to 5.25% one year later. Increases […] More
Deeper Analysis
Post-Great Recession Recovery Too Short and Too Shallow in the Euro Area
November 15, 2011
The Great Recession was associated with a 2008 calendar year uptick of Euroland GDP of just 0.4% followed by a contraction of 4.2% in 2009. In the ensuing recovery, real GDP expanded by 3.8% over the nine quarters between mid-2009 and 3Q11 including gains of just 0.2% each in the two most recent periods. A […] More
New Overnight Developments Abroad - Daily Update
Investors Fed Up with the Toxic Rhetoric of European Officials
November 15, 2011
Risk aversion has spiked. The German Dax, Paris Cac and British Ftse have so far dropped today by 2.4%, 2.1%, and 1.4%. Ten-year Italian bond yields of are again more than 700 basis points above German bunds. German bunds and British gilts have fallen by three and four basis points. The dollar is stronger, and […] More
New Overnight Developments Abroad - Daily Update
European Worries Return
November 14, 2011
Risk aversion picked up anew. The dollar is 0.2% softer against the yen but has advanced 0.6% against the euro, 0.8% versus sterling, 0.7% relative to the loonie, 0.4% against the Australian dollar and 0.3% versus the kiwi, Swissie, and yuan. The Paris Cac, German Dax, and British Ftse have traded down 1.0%, 0.7%, and […] More
Deeper Analysis
Japanese Real GDP Grew at a 6.0% Annualized Rate Last Quarter
November 13, 2011
Despite appearances, growth of 6% was not a big deal. Japan remains a fragile economy, with wide swings in quarter-to-quarter growth. Real GDP last quarter was unchanged from a year earlier, showed annualized growth of negative 0.3% from five years before, that is the third quarter of 2006, showed annualized growth of 0.8% over the […] More
Foreign Exchange Insights and Next Week
Next Week
November 11, 2011
Central banks hold policy meetings next week in Japan and Chile, while minutes from the November Australian central bank meeting will be released. The Bank of Japan monthly assessment and the Bank of England’s quarterly Inflation Report arrive, too. Japan and the euro area release 3Q GDP figures. The latter will include an estimate for […] More
Foreign Exchange Insights and Next Week
Currencies Dancing to the Beat of News Headlines
November 11, 2011
Intra-day volatility continues to dwarf any sense of purposeful direction in the arena of foreign exchange. News headlines related to the euro debt crisis are producing wild swings in equities as well. The dollar at 16:00 GMT today was a mere 0.4% stronger against the euro than its closing value last week. It had fluctuated […] More
Central Bank Watch
Malaysian Monetary Policy on Pause since May to Remain So
November 11, 2011
Bank Negara Malaysia had already made four rate increases, each of 25 basis points, in March, May, July of 2010 and May of this year, but policy has been paused for the past six months. The final policy meeting of 2011 decided to leave the overnight policy interest rate unchanged yet again at its current […] More
