Central Bank Watch
A More Dovish Statement from the Bank of Korea
November 11, 2011
The seven-day repo rate was left at 3.25% for the fifth time in a row. Five previous rate increases of 25 basis points each were implemented in July and November of 2010 and January, March and June of this year. During the current policy pause, Bank of Korea officials had maintained a tightening bias, but […] More
Central Bank Watch
Peruvian Central Bank Reference Rate Left Unchanged at 4.25%
November 11, 2011
This decision takes into account the lower growth being recorded by some components of expenditure, as well as the intensification of international financial risks. Should these trends continue, the Central Bank will change its monetary policy stance. A statement from officials at the Central Reserve Bank of Peru from which the above passage is excerpted […] More
New Overnight Developments Abroad - Daily Update
11-11-11: One’s Are Wild
November 11, 2011
It’s Veterans Day in the United States, France and Canada. The Armistice to end the First World War was signed 93 years ago today. Overnight market activity was comparatively subdued, but closures for today’s holiday will be only partial. U.S. stock markets are open. The new Greek cabinet to be headed by Lucas Papademos has […] More
Central Bank Watch
South African Reserve Bank: Policy Remains on Pause
November 10, 2011
South Africa’s benchmark interest rate was last changed a year ago when a 50-basis point reduction to 5.5% culminated a nine-step 650-bp point easing of monetary policy. A new statement today from monetary authorities revised projected inflation somewhat upward but said that the weaker domestic economic growth in 2Q11 persisted in 3Q and that downward […] More
Central Bank Watch
Bank Indonesia Eases Monetary Policy for Second Month in a Row
November 10, 2011
Indonesia’s reference central bank interest rate has been cut somewhat unexpectedly by 50 basis points to 6.0%. The rate was slashed by 300 basis points between December 2008 and August 2009 and had remained at 6.5% until a 25-bp rate hike in February 2011. Bank Indonesia had thus been among the last Asian central banks […] More
Central Bank Watch
Bank of England: No Changes
November 10, 2011
The nine-person Monetary Policy Committee, which in October raised the limit on its Asset Purchase Program to GBP 275 billion from GBP 200 billion, did not change such further and also left Britain’s Bank Rate at 0.5%, where such has been since March 2009. The central bank’s quarterly inflation report will be published on November […] More
New Overnight Developments Abroad - Daily Update
A Big Rumor
November 10, 2011
Yesterday’s market extremes initially continued Thursday but have moved back somewhat amid unconfirmed rumors of a special ECB Governing Council meeting to authorize much heavier, possibly unlimited, bond purchases via the SMP facility. Even if true, it seems doubtful that such would be a lasting panacea for what has evolved into an insolvable quagmire. The […] More
Central Bank Watch
Unchanged Polish Monetary Policy
November 9, 2011
Officials at the Narodowy Bank decided to leave their seven-day reference interest rate at 4.5% as they had decided at the previous three policy meetings and as analysts were anticipating. Four increases of 25 basis points each were undertaken in the first half of 2011, snapping a 19-month pause at 3.5%. In the Great Recession, […] More
New Overnight Developments Abroad - Daily Update
Another Ugly Day in the Marketplace Thanks to Europe
November 9, 2011
The embattled Italian Prime Minister Berlusconi agreed to resign once budget cuts and economic reforms are approved by parliament. Nevertheless, Italian sovereign debt yields are sharply higher. The five-year advanced to a crippling 7.14%, and the 10-year spread versus German bunds widened to as much as 536 basis points. Italian elections are likely in February, […] More
Deeper Analysis
Bad News Trumps Good News
November 8, 2011
It’s being reported that Lucas Papademos will be chosen to head up the Greek Unity government. With a doctorate in economics from MIT and prior experience as the Governor of the Bank of Greece and Vice President of the ECB, Mr. Papademos is highly regarded and the best candidate for this temporary position until elections […] More
