Central Bank Watch
Swiss Economy Very Exposed to Euroland’s Problems
December 15, 2011
The Swissie rose against the euro today when Swiss National Bank officials did not change the currency’s minimum exchange rate of 1.2 per euro following a scheduled quarterly review of monetary policy. In a released statement, however, central bank officials re-promised to spare no effort enforcing the exchange policy introduced September 6, and they predicted […] More
Deeper Analysis
How the U.S. Current Account Was Funded in the Third Quarter
December 15, 2011
The U.S. balance of payments strengthened in 3Q. This improvement was not associated with a stronger average dollar than in 2Q, but it foreshadowed the appreciating trend being seen lately. The current account deficit narrowed 11.6% last quarter and to 2.9% of GDP from 3.3% in the second quarter. Private capital inflows, including the statistical […] More
New Overnight Developments Abroad - Daily Update
Considerable Quantity of New Data to Absorb
December 15, 2011
At the quarterly monetary policy review, the Swiss National Bank did not adopt a weaker franc/euro ceiling rate but instead retained the 1.2000 level, which has been policy since September 6. The franc as a result is today’s strongest currency, rising 1.0% against the dollar. SNB officials also retained a zero-0.25% target range for three-month […] More
Deeper Analysis
Japanese Companies More Worried According to BOJ Tankan Survey
December 14, 2011
10,846 companies participated in the latest quarterly survey done by Japan’s central bank. In the table below which documents the evolution of results, abbreviations used in the first four columns of data stand for big manufacturers (Bm), big non-manufacturer (Bnm), small manufacturers (Sm) and small non-manufacturers (Smn). Where an “a” or no suffix is shown […] More
Central Bank Watch
Central Bank of Chile: No Rate Change after Monthly Meeting
December 14, 2011
Unlike their Brazilian counterparts, members of the Chilean Central Bank Policy Board have not yet cut their benchmark interest rate, which remains at 5.25% after the latest monthly meeting. That policy choice is not to say that officials are not closely watching the euro debt crisis. Despite recent announcements, the uncertainty persists about the resolution […] More
Central Bank Watch
Hong Kong Monetary Authority Follows Fed’s Cue
December 14, 2011
Hong Kong has a currency stability policy rather than an independent domestic interest rate policy. The enforcement of this goal, which the HKMA explains as below on its web site, is aided by the maintenance of a fixed premium of the Hong Kong base rate relative to the federal funds target. That spread had been […] More
Central Bank Watch
Norwegian Central Bank Eases More Forcefully Than Expected
December 14, 2011
The Norges Bank overnight deposit rate has been sliced 50 basis points to 1.75%. After the prior meeting in mid-October, officials on the Executive Board had predicted no changes “for some time ahead,” and analysts were debating whether Norwegian monetary officials would opt for a reduction of 12.5 bps or 25 bps. However, the ECB […] More
New Overnight Developments Abroad - Daily Update
European Equities Absorb New Hit
December 14, 2011
Share prices are so far down another 1.5% in France and 0.9% in Great Britain and Germany. Earlier, stocks fell 1.0% in China, 0.8% in India, 0.7% in Thailand and Sri Lanka, 0.5% in Hong Kong and Singapore, and 0.4% in Japan. The dollar had risen 0.5% against the kiwi, 0.2% versus the yen, loonie, […] More
Central Bank Watch
FOMC Decision
December 13, 2011
Today’s FOMC statement was as expected and little different in substance from the previous one six weeks ago. No changes were made to Operation Twist, a program to extend the average maturity of the Fed’s security holdings that was unveiled two meetings ago in September and is to run through next June. Further enhanced communication […] More
Larry's Blog
End of the Euro as We Know It
December 13, 2011
The belief is gaining adherents that a break-up of the euro is a matter of when, not if. The unthinkable is transforming into conventional wisdom of what will be. Potentially catastrophic financial and economic consequences of any modification in the 17-nation configuration of EMU, however small, had been the basis for the perceived impossibility of […] More
