Central Bank Watch
FOMC Day
December 13, 2011
The Federal Open Market Committee held its eighth and final regularly scheduled monetary policy meeting of 2011 today and will release its formal statement at about 14:15 Eastern Standard Time (19:15 GMT). This is not one of the meetings to be followed by a Bernanke press conference. That fact and somewhat better-than-expected U.S. economic data […] More
New Overnight Developments Abroad - Daily Update
Less Risk Aversion than Yesterday… Investors Await FOMC Statement
December 13, 2011
After difficult trading on Monday, European equities have recovered 0.8% in Germany, 0.5% in Great Britain and 0.2% in France. Psychology got a boost from better-than-expected data from the German ZEW Institute and Spain’s bill auction, which sold more paper than planned. In earlier Pacific Rim trading, stocks fell by 2.3% in China, 1.9% in […] More
New Overnight Developments Abroad - Daily Update
Misgivings Surface about EU Summit
December 12, 2011
In an inactive day from a data release standpoint, Commodity prices, European stocks and major European currencies have weakened. The pattern is all too familiar. The immediate immediate market reaction to plans to stop the euro debt problem is fleeting once analysts point out that symptoms but not causes have been addressed. The dollar has […] More
Foreign Exchange Insights and Next Week
Next Week
December 9, 2011
There are central bank monetary policy meetings next week in the United States, Norway, and Switzerland. Featured data releases are Japan’s quarterly business “Tankan” survey, the preliminary euro area PMI readings, British consumer prices, labor statistics and retail sales, and U.S. consumer and producer prices, retail sales and the current account. Many other economic releases […] More
Foreign Exchange Insights and Next Week
Reflecting on Currency Prospects after the EU Summit
December 9, 2011
The agreement reached by EU leaders in Brussels is neither as impressive as market participants had wished nor the kind of utter failure that would have broken the common currency within weeks. The plan hardly constitutes a bazookette, let alone the big bazooka that was promised last summer. It is not a recipe for short- […] More
New Overnight Developments Abroad - Daily Update
Euroland Accord Gets Mixed Reviews
December 9, 2011
EU leaders announced their fifth effort to stop the sovereign debt chain reaction. It features automatic mechanisms to rein in structural deficits that surpass 0.5% of GDP and to penalize total deficits in excess of 3.0% of GDP. The EFSF rescue fund would be activated next year rather than not before 2013 and is to […] More
Central Bank Watch
Mixed Message from the ECB, and Markets Weaken in Response
December 8, 2011
The good news was a rate cut of 25 basis points, downwardly revised forecasts of inflation, and a number of unconventional measure modifications to facilitate the transmission of policy. The ECB, for instance, will now do a few three-year fixed rate refinancing operations, exceeding the prior limit of a one-year maturity. Rules on eligible collateral […] More
Central Bank Watch
Bank of England: No Surprises
December 8, 2011
The Monetary Policy Committee launched a new GBP 75 billion round of long-term asset purchases in October 2011 that will not be completed until late January 2012. The 0.5% Bank Rate level since March 2009 has long been declared the technically appropriate floor. As expected, the Bank of England did not make further policy changes […] More
Central Bank Watch
Peru Central Bank Rate Kept at 4.25%
December 8, 2011
Peruvian monetary policy has been paused since May 2011 following ten hikes totaling 300 basis points squeezed into a 12-month period. A statement from the Central Reserve Bank of Peru contains standard boiler plate anti-inflationary stuff, tying future policy moves to “the evolution of inflation and its determinants.” The statement blames temporary factors for a […] More
Central Bank Watch
Indonesian Monetary Policy Left Unchanged this Month After Rate Cuts of October and November
December 8, 2011
Bank Indonesia’s reference interest rate was left at 6.0% after this month’s policy meeting. Such was reduced by 25 basis points in October and 50 bps last month, and it is now lower than the post-Great Recession low of 6.5% maintained from August 2009 until a 25-bp rate hike in February 2011. During the Great […] More
