Foreign Exchange Insights and Next Week
Never Underestimate the Power of Fear Itself
October 15, 2014
These are fearful times for financial markets and the general public. It’s much easier to believe in Murphy’s Law that if something can go wrong it will than to dismiss the recent market swings as fleeting hysteria that will self-correct because economic trends are fundamentally sound. The list of stress points is lengthy: Euroland is […] More
Central Bank Watch
Bank of Korea Cuts Seven-Day Repo Rate
October 15, 2014
Citing sluggish capital investment, subdued business confidence, a later likely end to the current output gap, and thus weaker inflationary pressure than foreseen previously, the Bank of Korea released a statement explaining its reasons for cutting the key interest rate to 2.0%. This level matches the post-Great Recession low maintained from April 2009 until a […] More
New Overnight Developments Abroad - Daily Update
Sinking Commodities Squelching Any Threat of Higher Inflation
October 15, 2014
WTI oil at $80.83 per barrel is down 1.2% on the day, bring its cumulative drop since June 20 to 24.4%. Comex gold at $1,223.20 per ounce is down 0.9% on the day and 31% below its level of two years ago. The Bloomberg Commodity index hit a 5-1/4 year low today. The International Energy […] More
Central Bank Watch
Monetary Authority of Singapore’s Semi-Annual Policy Review
October 14, 2014
The operating target of monetary policy is an exchange rate corridor, and interest rates are kept at whatever level will meet the S-dollar’s target. Like the previous four semi-annual reviews, the mid-point, slope, and width of the exchange rate target band were left unchanged. The target allows for a “modest and gradual” appreciation of the […] More
New Overnight Developments Abroad - Daily Update
Another Volatile Trading Session
October 14, 2014
The dollar is stronger except against the yuan and yen. Especially large advances of 1.0% and over 1.5% have occurred against sterling and the Swedish krona following reports of that British CPI inflation fell 0.3 percentage points (ppts) to a 5-year low of 1.2% and Swedish consumer prices, also in the year to September, had […] More
New Overnight Developments Abroad - Daily Update
Markets Closed for Holiday in Japan, the United States and Canada
October 13, 2014
After last week’s swoon, financial market volume on Monday will be suppressed by three market closures, Japan for Health and Sports Day, the U.S. for Columbus Day, and Canada for Thanksgiving. Stocks in the Pacific Basin closed down 2.8% in Taiwan, 1.1% in New Zealand, 1.0% in Indonesia, 0.7% in Singapore and South Korea, 0.6% […] More
Foreign Exchange Insights and Next Week
Next Week
October 10, 2014
The annual meeting of the IMF/World Bank continues place in Washington this weekend. A triple Monday holiday kicks off the week: Columbus Day in the U.S., Thanksgiving in Canada and Health/Sports Day in Japan. Central bank policy meetings are scheduled in South Korea, Chile and Serbia. The Fed Beige Book of regional trends arrives on […] More
New Overnight Developments Abroad - Daily Update
Weak Data Fuels Further Selling Pressure on Oil and Equities
October 10, 2014
Equities sold off further in Asia and Europe. The dollar is mostly higher. Many in the U.S. are observing a 3-day weekend for the Columbus Day holiday. WTI oil dropped more than 1% to $84.55. Gold is 0.2% softer. 10-year gilt yields are five basis points lower. 10-year sovereign debt yields remain below 1.0% in […] More
Central Bank Watch
Central Reserve Bank of Peru Leaves Key Interest Rate Benchmark at 3.5%
October 9, 2014
There had already been three Peruvian central bank cuts since November 2013, most recently at the previous meeting in September. Each reduction was a quarter of a percentage point. While not cutting again this month, a released statement from the central bank promised to “implement additional monetary easing measures if it is necessary” and did […] More
Central Bank Watch
Bank of England Review
October 9, 2014
A terse boilerplate statement was released today at the end of the Monetary Policy Committee’s October meeting, leaving the Bank Rate at 0.5% and the size of the bond purchase program at 375 billion pounds. The last rate change occurred in March 2009, when quantitative stimulus was also introduced. The last increase of the asset […] More
