Deeper Analysis
February in Figures
February 28, 2013
During February, commodity prices and sovereign debt yields fell, while the dollar advanced pretty much across the board. Three-month deposit rates stayed very low and edged marginally downward in some cases. Equities rose on balance but not as much as in January. The biggest stock market increases were in Japan and Switzerland, matching up with […] More
Foreign Exchange Insights and Next Week
Little Settled after a Newsworthy Week
February 28, 2013
Net dollar movements in the Thursday-to-Thursday week since February 21st were insignificant is size despite a number of notable revelations during the period. Japanese Prime Minister Abe’s nominees for a new leadership team at the central bank were announced. This dovish team will serve for the next five years with the mission of ending deflation […] More
New Overnight Developments Abroad - Daily Update
Calm before U.S. Sequestration
February 28, 2013
It doesn’t look like the sequestration, across-the-board U.S. federal spending cuts, will be averted. But equities are doing well, with overnight gains of 3.0% in China, 2.0% in Hong Kong, 2.7% in Japan, 1.7% in Indonesia, 1.6% in the Philippines, and 1.3% in Australia. In Europe, the Dax and Spanish Ibex are 0.8% higher. The […] More
New Overnight Developments Abroad - Daily Update
Bernanke Put
February 27, 2013
Markets were reeling in the wake of Italy’s inconclusive election, but dovish remarks yesterday in round one of Humphrey-Hawkins testimony restored a better market tone that so far is holding. Bernanke reprises his testimony today before the House Financial Services Committee, beginning at 15:00 GMT. The dollar has fallen 1.1% against the yen, 0.2% versus […] More
Central Bank Watch
Magyar Nemzeti Bank
February 26, 2013
A seventh straight base rate reduction was approved in Hungary’s central bank in a split vote that put the outgoing governor in the minority camp. At 5.25%, the base rate is back to its Great Recession low. The first of this series of cuts was made in late August 2012, ending a span of seven […] More
New Overnight Developments Abroad - Daily Update
Currency Market Pause Between Major Events
February 26, 2013
Italian elections results sent all financial markets reeling yesterday, but incremental overnight movement in the dollar has been minimal. It will take quite a while before political direction will be established in the euro area’s third largest economy, which places the prospects for reforms and continuing financial market calm in jeopardy. In the meantime, investors […] More
Central Bank Watch
Bank of Israel: No Rate Change
February 25, 2013
Israel’s key policy interest rate has been 1.75% since a 25-basis point cut in December. Such was the fourth cut of 2012 following ones in January, June and October, and the sixth overall since September 2011. Each of those cuts was by 25 basis points. From early 2009 through May 2011, the rate had been […] More
New Overnight Developments Abroad - Daily Update
Investors More Upbeat on Two Developments
February 25, 2013
It does not look like Berlusconi did well in Italian parliamentary elections, which end today. The three-time former center-right prime minister and opponent of externally imposed austerity needed a strong voter turnout, and such has been smaller thus far than expected. European stocks in response have jumped sharply by 2.3% in Germany, 2.1% in Italy, […] More
Central Bank Watch
Central Bank of the Republic of Colombia Cuts Interest Rate as Expected
February 22, 2013
A sixth 25-basis point interest rate reduction since July 2012 was announced by Colombia’s central bank in a unanimous 5-0 vote after “taking into account that the Colombian economy is growing below its potential, observed and projected inflation lie below the 3% target, and nowhere can be seen upward pressures on it in the near […] More
Foreign Exchange Insights and Next Week
Next Week
February 22, 2013
The coming week has two enormously important political events, Italy’s parliamentary election on Sunday and Monday, the outcome of which which will influence whether that country implements promised austerity and other reforms. Friday is the sequestration deadline in the United States. Estimates vary on how great a drag on growth and confidence such will exert […] More
