New Overnight Developments Abroad - Daily Update
Firmer Yen Ahead of ECB and Bank of England Decisions
December 8, 2011
Analysts are projecting a likely ECB rate cut at 12:45 GMT. Just in from the Bank of England is confirmation of no change in its monetary policy settings of a 0.5% Bank Rate and a GBP 275 billion ceiling on asset buying. There have been some bad vibrations out of Brussels, suggesting continuing disagreement over […] More
Central Bank Watch
Seven-Day Korean Repo Rate Kept at 3.25%
December 7, 2011
Bank of Korean monetary policy was left unchanged as expected. Five previous rate hikes of 25 basis points apiece were implemented, but none of these came after June. A new statement on the central bank’s web site projects only a moderate deceleration of inflation, which in November exceeded 4.0%, but also notes that growth has […] More
Central Bank Watch
Reserve Bank of New Zealand "Prudently" Retains a 2.5% Official Cash Rate
December 7, 2011
For the sixth meeting in a row, monetary officials in New Zealand left the OCR at 2.5%, which matches the Great Recession low. Seven cuts between July 2008 and April 2009 slashed the Official Cash Rate by 575 basis points. Two 25-bp hikes in June and July of 2010 to 3.0% were reversed by a […] More
Central Bank Watch
ECB Likely to Cut Interest Rate for a Second Straight Month
December 7, 2011
The stage seems set for a reduced refinancing rate of 1.0%. The announcement of this second straight 25-basis point rate cut will be made at 12:45 GMT on Thursday and would return such to the cyclical low that prevailed from May 2009 until April of this year. A press conference to explain the move will […] More
Central Bank Watch
Bank of England Preview
December 7, 2011
The Bank of England is currently engaged in a new round of quantitative easing, GBP 75 billion in size launched at the October monthly meeting of the Monetary Policy Committee and not set to be completed until late January. There is not a pressing need to change policy parameters this month. They are a 0.5% […] More
Central Bank Watch
National Bank of Poland
December 7, 2011
At the Narodowy Bank, the Monetary Policy Council decided to leave its reference interest rate unchanged for the fifth straight meeting. A 25-basis point hike in early June to 4.5% culminated a series of four such hikes in the first half of 2011. Officials consider that dose of restraint “significant” and are not inclined to […] More
Central Bank Watch
Bank of Iceland
December 7, 2011
Sedlabanki’s benchmark seven-day collateralized lending rate was left at 4.75%. Two 25-basis point increases were implemented after policy meetings on May 17 and November 2, while fifteen prior reductions from August 2009 through February 2011 slashed the key interest rate from 18.0% to a low of 4.25%. A new statement today from Icelandic monetary authorities […] More
New Overnight Developments Abroad - Daily Update
Europe Holds Key to Rest of December
December 7, 2011
Investors are marking time with guarded optimism that the ECB will cut rates tomorrow and that the EU summit will produce substantive policy changes. The Greek parliament approved an austerity budget for next year. Currency moves have been muted. The dollar is unchanged against the yen, loonie, and kiwi. The greenback rose 0.2% against the […] More
Central Bank Watch
But Bank of Canada Target Interest Rate Left Unchanged
December 6, 2011
Canada shares some similarities with Australia. Both are commodity-intensive advanced economies. The Canadian and Australian dollars are each historically high, points made in today’s respective statements from those country’s central banks. Headline inflation exceeds target in both nations but is projected to fall in the future. As noted, the Reserve Bank of Australia unwound the […] More
Central Bank Watch
Australian Official Cash Rate Sliced to 4.25%
December 6, 2011
The OCR was cut by 25 basis points for the second consecutive month. Fifty of a total 175 bps of tightening between October 2009 and November 2010 have now been reversed. A statement from Governor Glenn Stevens asserts that the “inflation outlook afforded scope for a modest reduction in the cash rate. The Board will […] More
