Central Bank Watch
Central Bank of Colombia Extends Policy Pause
June 28, 2013
After six 25-basis point cuts in Colombia’s main interest rate between July 2012 and February 2013, the ante was doubled to 50 bps at the March meeting, but the ensuing three meetings in April, May and now June resulted in no change to the 3.25% interest rate. Growth has responded positively to the monetary stimulus […] More
Deeper Analysis
June in Figures
June 28, 2013
It’s been quite a month and quite a quarter for world financial markets. Long-term interest rates rose sharply in the quarter, but note that Abenomics succeeded in preventing JGB yields from climbing further in June even as rates elsewhere continued their ascent. The Australian and New Zealand dollars were especially weak in both the quarter […] More
Foreign Exchange Insights and Next Week
Next Week
June 28, 2013
Next week is the first one of the third calendar quarter. Monday kicks off with the Bank of Japan’s quarterly Tankan survey of corporate business conditions and expectations. Monday starts the Mark Carney era at the Bank of England and Lithuania’s half-year stewardship of the EU presidency. Various and sundry purchasing manager surveys — over […] More
New Overnight Developments Abroad - Daily Update
Data Deluge, Press Report Denials, and Quarter-End
June 28, 2013
Lots of data were released on this final working day of the second quarter. Japanese figures show stronger inflation and activity. German retail sales also beats expectations. German CPI inflation accelerated. Being the final trading day of the quarter, position-squaring could impact market action today. An unidentified ECB official called German press reports erroneous that […] More
Central Bank Watch
Czech National Bank
June 27, 2013
Monetary officials decided to keep the two-week repo rate at 0.05%, its level since a 20-basis point cut last November. Inflation risks lie to the downside, and growth last quarter was negative and worse than assumed in both quarterly and on-year terms. A statement speaks of a greater readiness to engage in currency market intervention […] More
Central Bank Watch
Central Bank of the Republic of China (Taiwan)
June 27, 2013
Taiwan’s discount rate was left unchanged at 1.875%, where such has been for the past two years. The unanimous vote to keep the status quo was anticipated. Based on an assessment of lingering global economic uncertainties, a mild recovery of the domestic economy and subdued inflationary pressures, the Board judged that the current policy stance […] More
New Overnight Developments Abroad - Daily Update
Many Data Releases as Midyear Draws Near
June 27, 2013
Stocks rallied further in Asia but not Europe. Share prices increased 3.0% in Japan, 2.9% in South Korea, 3.4% in the Philippines, 1.9% in Indonesia, 1.8% in India, 1.7% in Australia, and 1.3% in Taiwan but slid 0.4% in China and Singapore. Equities in Europe are down 1.0% in Spain and 0.1% in Italy, unchanged […] More
Foreign Exchange Insights and Next Week
Bernanke Bombshell Plus a Week
June 26, 2013
The impact on the dollar lingers even though the Fed’s provocatively hawkish message has been tempered by the subsequent comments of other Fed officials and by today’s revised first-quarter U.S. GDP estimates. At this hour, precisely a week has elapsed since the FOMC statement was released. On balance over this week, the dollar is holding […] More
New Overnight Developments Abroad - Daily Update
Mixed Dollar Ahead of GDP Release and 5-Year Treasury Auction
June 26, 2013
The dollar rose overnight by 0.4% against the euro and sterling, 0.2% relative to the Swiss franc and kiwi and 0.1% against the yuan. The dollar also lost 0.4% versus the Canadian dollar and yen and 0.5% against the Australian dollar. Chinese money markets are showing less strain but still not back to normal. Former […] More
Deeper Analysis
The Crux of the Fed Tapering Debate Boils Down to the Likely Future Growth Rate
June 25, 2013
The long-term growth rate of U.S. real GDP has been decelerating. Real GDP expanded at a 4.0% annualized growth rate over the 25 years to the fourth quarter of 1974 and 3.3% per annum over the ensuing quarter century to 4Q99. Since end-1999, GDP has climbed at a 1.7% annualized rate including 1.8% over the […] More
