Central Bank Watch
ECB Hidden Agenda: Weaker Euro
November 6, 2014
The ECB didn’t change its three interest rates. The refinancing rate of 0.05% has been flanked by a marginal lending rate of 0.3% and a deposit rate of -0.20%. Each was cut by 10 basis points in September. Draghi’s main message, emphasized in his press conference, is that the ECB balance sheet will be expanding […] More
New Overnight Developments Abroad - Daily Update
Dollar Little Changed Ahead of Draghi Monthly Press Conference
November 6, 2014
The dollar is up 0.2% versus sterling and 0.1% relative to the loonie, unchanged against the kiwi and yuan, and down by 0.3% against the euro, 0.2% vis-a-vis the Swissie and Aussie dollar, and 0.1% relative to the yen. South Korean officials complained about the recent weakening trend of the yen and said more would […] More
Foreign Exchange Insights and Next Week
Dollar on a Roll in Spite of Obama
November 5, 2014
Rounding to the nearest percent, the dollar so far this year has appreciated about 10% against the euro, 9% against the yen, 8% versus the Swiss franc, 7% relative to the Canadian dollar, 6% vis-a-vis the kiwi, 4% against the Aussie dollar and sterling and even 1% versus the Chinese yuan. Given the widening perceived […] More
Deeper Analysis
Second Straight Decline in U.S. Non-manufacturing PMI Reading
November 5, 2014
Euroland’s service-sector PMI edged just 0.1 point lower in October. In contrast, the U.S. non-manufacturing PMI fell 1.5 points and recorded a decline of 2.5 points between August and October. The spread between the U.S. and Ezone measures contracted to 4.8 points from 6.2 points. However, the differential between their manufacturing PMIs had widened by […] More
Central Bank Watch
Bank of Thailand Flags Risk of a Possible Additional Interest Rate Cut in the Future
November 5, 2014
The benchmark interest rate was left at 2.0%, its level since a 25-basis point reduction in March 2014. That cut was the sixth such drop since November 2011, and a released statement revealed a dissenting vote in favor of easing policy now. The committee expresses concerns regarding greater downside risks from global growth and the […] More
Central Bank Watch
Bank of Iceland Cuts Interest Rate
November 5, 2014
Iceland’s one-week central bank lending rate was changed today for the first time in two years. A cut of 25 basis points to 5.75% reversed a similar-sized increase in November 2012 that culminated 175 basis points of tightening begun in August 2011. The explanation in a released statement focused on lower inflation and indications of […] More
New Overnight Developments Abroad - Daily Update
Volatile Markets in Aftermath of Republican Big Win
November 5, 2014
Republicans retook control of the Senate and will hold at least 52 of the 100 seats. Republicans defended the House of Representatives where they will hold at least 56% of the seats. Republicans also will control 5/8ths of the state governorships. In more cases than not where Republicans won, the margin of victory was greater […] More
Central Bank Watch
National Bank of Romania Eases Monetary Policy in Three Ways
November 4, 2014
A quarterly review of the outlook for inflation in which the forecast was cut sharply to 1.5% at end-2014 and 2.2% at end-2015, provided an opportunity for monetary officials to ease policy further. In explaining the forecast change, a released statement calls attention to “the persistence of the negative output gap, the consolidation of inflation […] More
Central Bank Watch
Reserve Bank of Australia
November 4, 2014
The Official Cash Rate has been 2.5% since August 2013 and will continue at that level. Two 25-basis point cuts administered in May and August of that year followed reductions totaling 125 bps in 2012 and 50 bps in 2011. The current stance is “accommodative” yet “appropriate,” according to the RBA Board in light of […] More
New Overnight Developments Abroad - Daily Update
Grim EU Economic Outlook in the Spotlight
November 4, 2014
The EU Autumn economic outlook was released, revising projected real growth for the euro area in 2014 down 0.4 percentage points to 0.8% and projected 2015 growth down 0.6 percentage points to 1.1%. Previously, GDP decelerated from 2.5% per annum in 1995-99 to a 1.9% pace in 2000-04 and 0.7% per annum in 2005-09, and […] More
