Central Bank Watch
Monetary Tightening Begins in New Zealand
March 12, 2014
Governor Wheeler announced a hike in New Zealand’s Official Cash Rate (OCR) from 2.5% to 2.75%. Thus begins the second effort since the Great Recession by the Reserve Bank of New Zealand to nomalize interest rates. The first attempt raised the rate twice by 25 basis points in June and July of 2010 but was […] More
Central Bank Watch
Thailand Gets First Interest Rate Cut in Four Months
March 12, 2014
Thailand’s Monetary Policy Committee cut the Bank of Thailand policy interest rate to 2.0% from 2.25%. Prior reductions of 25 basis points were implemented in November 2011, January and November 2012, and May and November 2013. Before that, officials had raised the key rate in nine moves by 225 bps to 3.5% from 1.25% after […] More
New Overnight Developments Abroad - Daily Update
Risk Aversion Intensifies
March 12, 2014
The Ukraine political standoff, the inexplicable loss of Malaysian Airlines Flight 370, ongoing concern about China’s economic outlook, and disappointment over the lack of more monetary stimulus in Japan have weighed further on financial market sentiment. Share prices in Europe are down by 1.4% in Germany and France and 1.1% in Spain after a 394-point […] More
Central Bank Watch
Bank of Japan’s Last Meeting Before the Consumption Tax Hike Ends Without a Policy Change
March 11, 2014
Officials decided yet again that a year-old policy is achieving desired results and showing adequate progress. The policy commits to Buying JGBs at an annual pace of JPY 50 trillion. Running a virtual zero interest rate policy with an objective overnight rate of 0.0-0.1%. Doubling the average maturity of the BOJs JGB portfolio to seven […] More
New Overnight Developments Abroad - Daily Update
Slow Day So Far
March 11, 2014
The U.S. dollar gained 0.2% overnight against the euro, Swissie and sterling and 0.1% versus the yen and loonie. The greenback is unchanged relative to the Australian dollar and yuan and down 0.1% against the kiwi. Share prices in the Pacific Rim rose 1.1% in Thailand, 0.7% in Japan, 0.6% in Indonesia, 0.5% in China […] More
Deeper Analysis
Expected Growth and Currency Movement
March 10, 2014
Early each March, the Economist’s monthly survey of forecasters introduces a new out-year. Growth projections for 2014 first appeared in the March 9-15th, 2013 issue, and the first forecasts for 2015 are in the current March 8-14, 2014 issue. The table below shows the growth rates survey participants were predicting for 2014 a year ago […] More
New Overnight Developments Abroad - Daily Update
Soft Japanese and Chinese Economic Statistics
March 10, 2014
Soft Japanese and Chinese data sent stocks lower in the Pacific Rim, but European markets have strengthened. U.S. clocks were put an hour ahead, shortening the time difference between EDT and GMT to four hours but lengthening the differential between Tokyo and New York to 14 hours. The situation in Crimea remains very tense. China […] More
Foreign Exchange Insights and Next Week
Next Week
March 8, 2014
Central bank interest rate policy meetings are scheduled next week in Japan, New Zealand, Russia, South Korea, Indonesia, Chile, Thailand, and Peru. The Bank of Japan releases its monthly assessment and minutes from its February 17-18 Board meeting. The Bank of England Quarterly Bulletin and European Central Bank monthly Bulletin arrive, too. Postponed senate nomination […] More
New Overnight Developments Abroad - Daily Update
Euro strengthens Past $1.3900 ahead of U.S. Jobs Report
March 7, 2014
Markets continued to push the euro higher after the ECB dug in its heels against more stimulus. Russian President likewise hasn’t stood down, fanning fear of a Russian assault in the Crimea. U.S. and Canadian labor market and trade figures are due at 13:30 GMT. The dollar lost 0.3% versus the euro is 0.4% weaker […] More
Central Bank Watch
National Bank of Poland Very Comfortable with its 2.5% 1-Week Repo Rate
March 6, 2014
Officials at Poland’s central bank on Wednesday not only kept their accommodative 2.5% interest rate but extended the likely interval before such is changed from the middle of this year to the end of the third quarter. An explanation of the decision revised projected inflation downward a bit even as the forecast for growth was […] More
