Archive for December 2011

Central Bank Watch

Swedish Riksbank Engineers First Repo Rate Cut since July 2009

December 20, 2011

Sweden’s repo rate has been reduced to 1.75% from 2.0% in a move that analysts anticipated.  Seven previous rate increases of 25 basis points apiece had been implemented in June, September, October and December of 2010 and February, April and July of this year.  The Riksbank Executive Board also issued new guidance for future changes […] More

New Overnight Developments Abroad - Daily Update

For a Change Some Good News to Lift Risk Appetite

December 20, 2011

The dollar lost 1.0% against the Australian dollar, 0.9% versus the kiwi and sterling, 0.6% relative to the loonie, euro and Swissie, and 0.1% against the yen.  The yuan is steady.  Pre-Christmas thin trading volume has arrived, so feedback from the market needs to be taken with a grain of salt. The German Dax and […] More

Central Bank Watch

Bank of Japan Preview

December 19, 2011

The Bank of Japan’s monthly two-day policy meeting starts Tuesday.  The final scheduled Board meeting of the calendar year is usually a quiet affair.  Just twice in the last ten years, 2001 and 2008, was monetary policy changed at the December meeting, and both occasions involved adoption of an easier stance.  That continues to be […] More

New Overnight Developments Abroad - Daily Update

North Korean Dictator Dies

December 19, 2011

Kim-Jong II died of a heart attack.  His presumed 28-year-old son and heir apparent, Kim Jong Un, has been named leader of this rogue state.  However, a power struggle cannot be ruled out.  The South Korean Kospi index fell 3.4%, and the won fell, too. S&P did not announced a wholesale downgrading of Euroland member […] More

Central Bank Watch

Colombian Central Bank Rate Kept at 4.75% as Expected

December 16, 2011

Speaking about downside risks stemming from Europe and predicting that Colombian CPI inflation will fall below 4% this year on a December-over-December basis, the authorities at the Central Bank of the Republic of Colombia did not raise its key intervention rate for the fourth time in five meetings.  The exception was a 25-basis point hike […] More

Foreign Exchange Insights and Next Week

Next Week

December 16, 2011

For the week before Christmas, a fairly sizable number of economic data releases are scheduled.  Plus there will be monetary policy meetings in Japan, Sweden, the Czech Republic, Russia, Poland, and Turkey.  Japanese markets will be closed Friday for the Emperor’s birthday. The Bank of England and Reserve Bank of Australia both publish minutes of […] More

Foreign Exchange Insights and Next Week

Currency Markets Head into the Home Stretch of 2011

December 16, 2011

Currency trading has unique properties in the final weeks of the calendar year.  Market professionals will be closing their books, taking some days off, and generally become less responsive to the flow of fundamental economic and political news than in the other fifty weeks of the year.  This is more true of the week before […] More

Central Bank Watch

Possible Turning Point in India’s Monetary Policy Cycle

December 16, 2011

The Reserve Bank of India (RBI) left its monetary policy settings unchanged.  The repo (lending) rate and reverse repo (borrowing) rate stayed at 8.5% and 7.5%, and the reserve requirement ratio is 6.0%.  There had been thirteen rate hikes since March 9, 2010, culminating in a 25-bp increase at the prior meeting of October 25 […] More

New Overnight Developments Abroad - Daily Update

Lighter Data Calendar at End of Difficult Week

December 16, 2011

Investors await with trepidation the continuing and still-uncontained European sovereign debt and banking crisis.  ECB President Draghi maintains the view that the central bank has no silver bullet and that it’s up to national governments to implement asap those steps agreed on December 9.  The pessimistic mood is captured by IMF Managing Director Lagarde’s dire […] More

Deeper Analysis

Yearend Seasonality of the Dollar

December 15, 2011

This note updates a posting I screened on these pages one year ago, which documented a tendency for the dollar to ease between mid-December and yearend against the major currency of Europe.  A similar pattern cannot be observed in dollar/yen, nor is there a pronounced seasonal pattern in the first half of December.  The linked […] More

css.php