Archive for August 2013

New Overnight Developments Abroad - Daily Update

New Zealand and Australian Central Banks in Spotlight

August 20, 2013

Central bank remarks, concerns about China, and softer commodities weighed on the kiwi and Aussie dollar, which respectively fell by 1.0% and 0.5% against their U.S. counterpart. Governor Wheeler of the Reserve Bank of New Zealand announced planned bank lending curbs to rein in house price inflation to be used in lieu of a hike […] More

New Overnight Developments Abroad - Daily Update

Lower Bond and Stock Prices

August 19, 2013

Financial turbulence in Indonesia where 1) equities plunged 5.6% to a 21-month low, 2) the rupiah dropped 1% and touched 10,500/USD for the first time in four years, and 3) the 10-year bond yield advanced to a 29-month high.  Markets have reacted adversely to a string of bad economic news including Friday’s report of a […] More

Foreign Exchange Insights and Next Week

Next Week

August 16, 2013

Central Bank meetings are scheduled in Turkey, Israel, Thailand and Iceland.  Minutes from the last FOMC and Reserve Bank of Australia meetings will be published. There may be less interest than usual in the Jackson Hole Symposium hosted by the Kansas City Fed because Fed Chairman Bernanke will not be attending, and fewer stars are […] More

Deeper Analysis

Three More U.S. Data Releases

August 16, 2013

The housing and labor productivity reports pose no impediment to apparent FOMC plans to rein back asset purchases as soon as the September policy meeting.  Housing starts bounced 5.9% in July and were 20.9% higher than a year earlier, results that were marginally better than forecast.  Building permits also climbed 2.7%, auguring a continuing uptrend […] More

Central Bank Watch

Central Bank of Sri Lanka

August 16, 2013

As in June and July, Sri Lankan central bank interest rates were left unchanged after this month’s policy meeting, but a statement released by the authorities hints of a possible further cut in the future.  The repo rate and reverse repo rates were cut by 25 basis points last December and another 50 bps on […] More

New Overnight Developments Abroad - Daily Update

A Less Volatile Day So Far than Thursday

August 16, 2013

The dollar is unchanged against the Swiss franc, kiwi and yuan.  The greenback has edged up 0.2% versus the Canadian dollar and 0.1% relative to the euro, yen and sterling while dropping 0.3% against the Australian dollar. Share prices slumped around the Pacific Rim by 3.9% in India, 2.5% in Indonesia, and 0.8% in the […] More

Foreign Exchange Insights and Next Week

No More Fun Watching Currencies

August 15, 2013

The thrill is gone for long-time dollar watchers like myself and not because of a lack of interesting developments happening on the policy front, in economic trends, or to other markets.  Middle East violence is again holding the world hostage both politically and economically.  Europe seems to be emerging from recessions but with its banks […] More

Central Bank Watch

Bank Indonesia Officials Decline to Tighten Further

August 15, 2013

Benchmark interest rate hikes of 25 basis points in June and 50 bps in July reversed cuts administered in November 2011 and February 2012.  The present central bank rate level of 6.5% matches the level maintained until February 2011 in the wake of the Great Recession. A further hike in the benchmark interest rate was […] More

New Overnight Developments Abroad - Daily Update

Awaiting U.S. Data on this Historic Anniversary

August 15, 2013

There is a big U.S. data release calendar that includes industrial production, the Philly Fed and Empire State manufacturing indices, the National Association of Home Builders index, Treasury-reported capital flows (TIC), and weekly jobless insurance claims.  Former President Nixon severed the link between the dollar and gold 42 years ago today. Trading in Europe was […] More

Deeper Analysis

Few Comments on Euroland GDP Figures

August 14, 2013

Note that Euroland expresses GDP changes without the U.S. convention of annualization.  Thus U.S. second quarter GDP growth, which was reported earlier as 1.7% — the change if the 2Q-over-1Q pace were sustained for a full year — would in the European custom be expressed as a 0.4% advance.  Similarly, British and Japanese growth on […] More

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