Foreign Exchange Insights and Next Week
Dollar Supported by Economic and Geopolitical Developments
December 17, 2014
Plunging Oil Prices: As Fed Chair Yellen opined today, oil prices have declined substantially in a short period of time, surprising the FOMC and most of the financial markets with the abruptness and severity of the the drop. There are numerous and mixed ways that such a change will affect the U.S. and other economies. […] More
Central Bank Watch
Czech National Bank
December 17, 2014
Monetary policy was not changed further at this month’s meeting of the CNB Board. The last cut of the two-week repo rate, a 20-basis point reduction from 0.25% to 0.05%, was enacted in November 2013. A year after that, monetary stimulus was enhanced when a one-sided 27 koruna per euro target was imposed. With the […] More
Central Bank Watch
FOMC Preview
December 17, 2014
In the seven weeks since the late October FOMC meeting, the price of West Texas Intermediate oil has plunged 32.7%, and the 10-year Treasury yield has fallen by 25 more basis points. Consumer prices in the five months since mid-2014 contracted 0.7% at an annualized rate, and core CPI rose only 1.1% annualized, which is […] More
Central Bank Watch
Bank of Thailand
December 17, 2014
The previous four meetings of Thailand’s Monetary Policy Committee on April 23, June 18, August 6, and September 17 had retained a 2.0% benchmark interest rate and so did today’s, although the 5-2 vote included two cast in favor of a 25-basis point cut. Officials at the Bank of Thailand released a statement whose majority […] More
New Overnight Developments Abroad - Daily Update
Awaiting the FOMC Statement and Yellen’s Press Conference
December 17, 2014
Stocks are lower and the dollar is firmer ahead of today’s FOMC news and the release of some U.S. data. There’s already been some central bank news in the U.K., Czech Republic and Thailand. The Asian Development Bank bumped projected 2015 growth and inflation in developing Asia slightly lower, and Japanese trade data for November […] More
Central Bank Watch
Magyar Nemzeti Bank: No Policy Change Likely for Considerable Time Longer
December 16, 2014
In 24 consecutive increments from August 2012 through July 2014, Hungary’s central bank base rate was cut from 7.0% to 2.1%, topped off by a 20-basis point reduction in the final step. There have now been five successive meetings with no rate change, and today’s statement, which asserts that Inflation in Hungary is likely to […] More
Central Bank Watch
Swedish Riksbank Seeking More Accommodation in Unconventional Means
December 16, 2014
The Swedish repo rate was cut to zero on October 28th, but a statement after this year’s final regular monetary policy meeting sends the message that attaining a zero nominal interest rate is not the end of the line for augmenting monetary stimulus. Rather explicit forward guidance is the first go-to policy tool, and it […] More
New Overnight Developments Abroad - Daily Update
Extremely Volatile Markets
December 16, 2014
A 650-basis point hike in the Central Bank of Russia’s one-week auction rate to 17% stemmed the ruble’s plunge only momentarily, and the currency posted its greatest daily drop since the 1998 default. Earlier today, it approached 80 per dollar, having only traversed the 40 level in October. There is talk that capital controls or […] More
New Overnight Developments Abroad - Daily Update
Japanese Election, BOJ Tankan, and a Hostage Crisis in Sydney
December 15, 2014
The LDP/Komeito coalition in Japan captured over 68% of the lower house parliamentary seats, enough to override opposition vetoes. Turnout of 52.4% in the snap election constitutes a record low and was down from 59.3% two years earlier. Prime Minister Abe had called the election as a confidence vote in his decision to delay a […] More
Foreign Exchange Insights and Next Week
Next Week
December 12, 2014
Central bank policy meetings will be held next week in the United States and Japan. This FOMC meeting sees the release of updated forecasts and will be followed by followed by a press conference. Other central banks with scheduled policy meetings next week are in Sweden, the Czech Republic, Hungary and Thailand. Minutes of the […] More
