Central Bank Watch
New Zealand Monetary Setting Still in Pause Mode at Very Accommodative Level
April 25, 2012
The last change in New Zealand’s Official Cash Rate (OCR) happened in March 2011 when a 50-basis point cut in the wake of the Canterbury earthquake returned the OCR to its cyclical low of 2.5%. Such had been at 2.5% also from April 2009 until June 2010. A statement on the Reserve Bank of New […] More
Deeper Analysis
Comments on the Bernanke Press Conference
April 25, 2012
Several useful messages were delivered at the press conference. One of the biggest downside growth risks still facing the United States is the uncertain degree of fiscal drag that will be felt at the start of next year. If Congress legislates no changes in planned austerity from the spending and tax side, the Fed Chairman […] More
Central Bank Watch
FOMC Statement
April 25, 2012
Today’s statement from the FOMC has extremely similar text to the previous statement of March 13 and the same 9-1 vote, with Richmond Fed President Lacker again dissenting because he “does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.” Almost all of the […] More
Central Bank Watch
FOMC Preview
April 25, 2012
In the six weeks since the last FOMC meeting, The dollar has softened 0.7% against the euro in spite of a reintensification of euro debt tensions. The dollar has also depreciated 1.7% relative to the yen. The ten-year Treasury yields is 8 basis points lower on balance and has dwelled below the psychological 2.00% level […] More
New Overnight Developments Abroad - Daily Update
Sterling Declined
April 25, 2012
Britain’s disappointing first-quarter GDP report depressed sterling. Small business sentiment in Japan also underperformed expectations. Speculation persists that the Bank of Japan will ease policy on Friday. Investors await today’s FOMC statement at 16:30 GMT and Fed Chairman Bernanke’s press conference at 18:15 GMT. New Zealand and Australia were closed to day for ANZAC Day, […] More
Central Bank Watch
7.0% Hungarian Base Rate Retained as Expected
April 24, 2012
The Monetary Council at Meyar Nemzeti Bank did not change its base rate for the fourth consecutive meeting and released a statement that enumerated many upside price risks such as past forint depreciation, elevated energy costs, higher excise duties, and a hike in value added taxation. On-year CPI inflation of 5.5% last month after 5.9% […] More
New Overnight Developments Abroad - Daily Update
FOMC Begins Two-Day Meeting
April 24, 2012
There’s been scant overnight movement in the dollar, which is unchanged against the euro, Swissie and loonie, up 0.1% relative to the yen and kiwi, and off 0.1% versus the yuan and sterling. EUR/USD continues to trade near $1.3150, and the yen has an 81 handle. Stocks in Asia and Europe were more stable than […] More
Central Bank Watch
Bank of Israel Policy Stays on Hold
April 23, 2012
Israel’s central bank benchmark hasn’t changed since a third cut of 25 basis points to 2.5% was implemented. From a 3.25% peak, reductions were also done in September and November 2011. A statement from the Bank of Israel cites a mix of considerations to account for the recent policy pause. The European debt crisis has […] More
New Overnight Developments Abroad - Daily Update
European April PMI Results Inspire New Wave of Investor Panic
April 23, 2012
European equities have plunged 3.2% in Sweden, 2.9% in Spain, 2.5% in Germany, 1.7% in France and 1.6% in Switzerland and Great Britain. In the Pacific Rim, there were some outsized drops in share prices such as 1.8% in Hong Kong, 1.6% in India and 1.1% in Singapore but also some smaller moves such as […] More
Deeper Analysis
G20 Weekend Statement Will Not Bring the Euro Debt Crisis to Closure
April 22, 2012
Finance ministers and central bank governors of the Group of Twenty meeting in Washington D.C. on Saturday released a statement that confirmed leaked reports of an accord to raise IMF resources “by over $430 billion in addition to the quota increase under the 2010 reform.” These augmented resources are to be available to all IMF […] More
