Central Bank Watch
Central Bank of the Republic of Colombia Lifts Key Interest Rate for a Second Time
May 31, 2014
April’s first Colombian central bank interest rate hike in 26 months has been followed by a second 25-basis point increase in May, taking the key rate to 3.75%. Before these back-to-back increases, the previous rate hike had occurred in February 2012, a move that culminated a streak of nine tightenings totaling 225 basis points. In […] More
Deeper Analysis
May in Figures
May 31, 2014
Stock markets in May took a more optimistic view of growth prospects than did bond investors, making May the unusual month in which both asset classes improved. Short-term interest rates remained anchored at very low levels. The euro lost strength on speculation that the ECB will ease policy significantly in June. From a monthly high […] More
Foreign Exchange Insights and Next Week
Next Week
May 30, 2014
Central bank policy meetings are planned next week at the European Central Bank, Bank of England, Reserve Bank of Australia, Bank of Korea, Reserve Bank of India, Bank of Mexico, National Bank of Romania, Bank of Canada, and National Bank of Poland. The Fed’s Beige Book of regional trends will be published, and Evans and […] More
New Overnight Developments Abroad - Daily Update
Another Month Going into the Books
May 30, 2014
There have been several Japanese data releases on this final business day in May. Industrial production sank 2.5% in April, trimming the 12-month increase to 4.1% from 7.4% in March. Officials project an increase of 1.7% in May followed by a 2.1% slump in June, and they reclassified the assessment of industrial production to “appears […] More
Central Bank Watch
Central Bank of Brazil
May 29, 2014
As widely expected, Brazil’s monetary policy committee, Copom, paused its tightening streak. After nine straight previous meetings spanning the year between April 2013 and April 2, 2014, the Selic interest rate had been raised each time and by a total of 375 basis points from a record low of 7.25% to 11.0%. This month, there […] More
Deeper Analysis
Comment on U.S. GDP Revision
May 29, 2014
Here’s what I take away from the 1.1 percentage point downward revision in first-quarter real economic growth to -1.0% at an annualized rate. Number one, although this is only the second negative quarter in the last nineteen quarters that comprise the current business upswing. Looked at that way, it’s an infrequent but not unusual or […] More
New Overnight Developments Abroad - Daily Update
Between Japanese Retail Sales and U.S. GDP this Ascension Day
May 29, 2014
A number of European markets were closed today in observance of Ascension Day. The first post-tax retail sales data in Japan were reported. Month-on-month (13.7%) and on-year declines (4.4%) were greater than forecast and the largest setbacks in three years. Large-store sales dived 6.8% between April 2013 and April 2014, as department store sales and […] More
Foreign Exchange Insights and Next Week
A Huge ECB Meeting Looms Ahead
May 28, 2014
From a euro high of $1.3993 on May 8 when the ECB Governing Council met this week to a low today of $1.3589, the euro has depreciated 2.9%, equivalent to a 3.0% recovery of the dollar against the common European currency. Never mind that ECB officials for years have preached to markets that they never […] More
New Overnight Developments Abroad - Daily Update
Firmer Stocks, Dollar and Yen
May 28, 2014
Share prices have risen 1.0% in China and South Korea, 0.7% in New Zealnad and Taiwan, 0.6% in Hong Kong, 0.4% in Indonesia, and 0.3% in Australia. In Europe, equities so far are up 0.8% in Italy, 0.3% in Spain, and 0.1% in Paris, London, Frankfurt and Zurich. The dollar is 0.1% softer against the […] More
Deeper Analysis
Decent Batch of U.S. Data Released This Tuesday
May 27, 2014
Although in line with street expectations, the Conference Board gauge of May consumer confidence printed 1.3 points higher than in April, at the highest point in over a year, and indeed at the second best level since 2008. The average level in April-May of 82.4 follows period averages of 80.0 in the first quarter and […] More
