Central Bank Watch
Central Bank of the Republic of Colombia Tightens
April 26, 2014
The Board considers that macroeconomic stability and the current convergence of inflation towards the long term goal, are compatible with a slightly less expansive monetary policy stance, a little less expansive than the current one. With that explanation, a 14-month-long low in Colombia’s central bank interest rate was terminated. The rate was raised to 3.5% […] More
Central Bank Watch
Another Tightening of Russian Monetary Policy
April 25, 2014
Officials at the Central Bank of the Russian Federation raised their one-week auction rate to 7.5% today and indicated that a cut in coming months is not in the cards. This tightening of monetary conditions follows a 150-basis point hike on March 3 and comes amid accelerating inflation and a mounting risk of rising inflation […] More
New Overnight Developments Abroad - Daily Update
Stocks Down but Dollar Pretty Steady
April 25, 2014
Share prices fell 1.9% in Taiwan, 1.5% in Hong Kong, 1.3% in South Korea, 1.0% in China, 0.8% in India and 0.5% in Singapore. Equities firmed 0.2% in Japan. European stocks so far show losses of 0.9% in Germany and Italy, 0.8% in Spain, 0.4% in France and 0.2% in Switzerland and Great Britain. U.S. equities […] More
Foreign Exchange Insights and Next Week
Euro Poker
April 24, 2014
The European Central Bank’s use of verbal intervention to contain the euro’s strength is producing diminishing results. A change in this tendency is unlikely during the weeks just ahead. The ECB Governing Council at the April meeting felt that more information needed to be gathered before broadening unconventional monetary stimulus. Much more pertinent data will be […] More
Central Bank Watch
Central Bank of the Republic of Turkey: Mixed Message
April 24, 2014
The latest policy statement from Turkish monetary officials struck a balance between guarding the lira against selling pressure and deferring to government pressure to ease. In order to protect the exchange rate and blunt the impact of depreciation on actual and expected inflation, the one-week repo rate had been lifted from 4.5% to 10.0% in […] More
New Overnight Developments Abroad - Daily Update
Muted Reaction to Draghi’s Verbal Intervention
April 24, 2014
European Central Bank President Mario Draghi issued his bluntest warning yet regarding a readiness to escalate and broaden asset buying should inflation follow a lower-than-assumed path. He explicitly said that additional euro appreciation could trigger such action unless the disinflationary implications are offset by other developments. The dollar is only 0.1% firmer against the euro and Swiss […] More
Central Bank Watch
New Zealand’s Second Central Bank Interest Rate Hike
April 23, 2014
Officials at the Reserve Bank of New Zealand as expected engineered a follow-up 25-basis point increase of their Official Cash Rate to 3.0% and released an extremely close facsimile to the March 13th statement that launched this tightening cycle. The OCR had been at 2.5%, a record low, for three years between March 2011 and […] More
Central Bank Watch
Bank of Thailand Elects Not to Cut Interest Rate Again
April 23, 2014
The monetary policy committee had reduced its policy interest rate five times – each by 25 basis points – since November 2012 and most recently this year on March 12. By a vote of 6-1 with a sole dissent favoring a sixth such reduction now, the MPC this time chose to leave the rate at […] More
New Overnight Developments Abroad - Daily Update
Data Factor Heats Up
April 23, 2014
April Flash PMI results are out for the euro area, China and United States. Other market-moving data released today are Australian consumer prices, U.S. new home sales, Ezone deficit- and debt-to-GDP ratios, and Britain’s industrial trends survey, BOE minutes, and fiscal 2013-14 totals. The U.S. dollar has jumped 1.0% against its Australian counterpart but shows […] More
Central Bank Watch
Central Bank of Sri Lanka
April 22, 2014
The last central bank rate change was a 50-basis point cut of the reverse repo rate to 8.0%, which cut its premium over the repo rate to 150 basis points from 200 bps. The April Policy Review left key rates unchanged as expected, observed total and core CPI inflation rates of 4.2% and 3.4%. As […] More
