Central Bank Watch
Peruvian Monetary Policy Unchanged
September 6, 2012
The Central Reserve Bank of Peru left its policy reference interest rate steady at 4.25% and released a statement that characterized recent higher inflation of 3.5% as temporary. While domestic demand is expanding near trend, global risks argue for caution. The central bank’s key rate has been 4.25% since a final hike in May 2011 […] More
Central Bank Watch
Swedish Riksbank Repo Rate Cut to 1.25% from 1.50%
September 6, 2012
In a somewhat surprising move, the Executive Board of central bank in Sweden cut its main interest rate for the third time in five meetings. The first cut since July 2009 was announced in December 2011 and followed by an easing at the subsequent meeting in February. The policy modification was driven by a new […] More
Deeper Analysis
Activity Gap Widened Last Month Between U.S. and Ezone
September 6, 2012
The ISM U.S. purchasing manager index in non-manufacturing increased 1.1 points to 53.7 in August, whereas Euroland’s services PMI fell by 0.7 points to a score of 47.2. The 6.5-point differential widened from a 7-month low in July to a 3-month high. This increasingly advantageous U.S. situation more than offset a 1.3-point decline in the […] More
Central Bank Watch
Bank of England
September 6, 2012
Members of the Monetary Policy Committee as expected did not change policy settings at this month’s two-day meeting. The strictly boiler plate statement released today divulged no fresh information for markets to mull. The Bank Rate has been at 0.5% since March 2009, and July’s increase in the asset purchase program by GBP 50 to […] More
Central Bank Watch
Bank Negara Malaysia Keeps Credit Policy Stance on Hold
September 6, 2012
Almost a year and a half have passed since the final of four 25-basis point rate hikes in the spring of 2011. Monetary officials again decided to keep its 3.0% overnight policy rate level and released a statement that identified “considerable uncertainties in the global economic and financial conditions” and noted that “with some excess […] More
Central Bank Watch
ECB Fleshes Out a New Facility to Buy Sovereign Bonds
September 6, 2012
There was one dissenter, presumably Germany, to today’s decision to launch Outright Monetary Transactions (OMT), which will purchase in the secondary market unlimited sovereign bonds with a maturity of between one and three years. Unlike prior efforts to buy such assets, the OMT has “strict and effective conditionality,” namely that the mandate is not jeopardized […] More
New Overnight Developments Abroad - Daily Update
Big Day for Central Bank Watching
September 6, 2012
The Aussie dollar has rebounded 0.5% against its U.S. counterpart in spite of soft Australian labor market data. The U.S. currency otherwise is unchanged against the yen and sterling and down by 0.3% against the kiwi, 0.2% relative to the loonie and 0.1% versus the euro, Swiss franc and yuan. High expectations ahead of the […] More
