Central Bank Watch
Reserve Bank of New Zealand Tightening Kept on Pause
December 11, 2014
Rate normalization began earlier this year with 25-basis point hikes of the New Zealand official cash rate in March, April, June and July. Like their two earlier meetings, officials did not tighten further at the final scheduled policy review of 2014, preferring to keep the OCR at 3.5%. A released statement observes benign inflation currently […] More
New Overnight Developments Abroad - Daily Update
Many Central Banks Are Heard From
December 11, 2014
Even before the highly awaited U.S. retail sales report, several central bank policy announcements held the market’s attention. The Reserve Bank of New Zealand kept its official cash rate at 3.5%. Although inflation is currently modest, it is expected to approach 2% later in the forecast period, and that will likely necessitate a further increase […] More
Central Bank Watch
Back-to-Back Icelandic Interest Rate Cuts
December 10, 2014
Sedlabanki’s Monetary Policy Committee has followed up November’s 25-basis point cut with a greater-than-forecast 50-bp reduction in Iceland’s seven-day lending rate to 5.25%, which is the lowest level in 2-1/2 years. A released statement justifies the action by lower inflation than forecast and signs that expected inflation has fallen, too. More cuts are not ruled […] More
New Overnight Developments Abroad - Daily Update
A Few Surprises
December 10, 2014
Chinese share prices rebounded 3.7% as CPI inflation falls to lowest level (1.4%) since November 2009. Producer prices meanwhile posted their greatest on-year decline (2.7% after 2.2%) since May 2013, further encouraging investors to speculate about another central bank rate cut in the world’s second biggest economy. The 10-year Japanese JGB yield dipped under the […] More
Foreign Exchange Insights and Next Week
Dollar in a Bear Market for Crude Oil
December 9, 2014
Over the last five months, the price of West Texas Intermediate oil has fallen 41% from roughly $107 per barrel to a low yesterday of $63.20, near which the market is trading currently. Oil oftentimes is volatile, swinging from $15.24 in June 1990 to $41.12 3-1/2 months later and then back to $18.88 by mid-March […] More
New Overnight Developments Abroad - Daily Update
Setback Extended in Share Prices
December 9, 2014
Monday’s slide in equities continued overnight in Europe and Asia. Stocks slumped 4.5% in China, 2.3% in Hong Kong, 1.7% in Australia, 1.2% in India and 0.7% in Japan. Equities are so far down 1.5% in Spain, 1.4% in Italy, 1.2% in France, 1.1% in Britain and 0.9% in Germany. Also consistent with the risk […] More
New Overnight Developments Abroad - Daily Update
A Slew of Data Releases to Start the New Week
December 8, 2014
Revised Japanese national income account statistics confirmed a technical recession in the world’s third largest economy. Real GDP was revised to show a larger quarter-on-quarter decline in 3Q of 1.9% at an annualized rate. Nominal GDP slumped 3.5% on quarter. Real GDP had fallen by 6.7% at a seasonally adjusted annualized rate (saar) in the […] More
Foreign Exchange Insights and Next Week
Next Week
December 7, 2014
Central bank policy meetings are scheduled during the week ahead in Norway, Switzerland, New Zealand, Chile, Peru, South Korea, Indonesia, The Philippines, Iceland, Serbia, and Russia. Euro area finance ministers and the Eurogroup meet on Monday-Tuesday. Many countries are set to report industrial production, consumer prices and trade figures. Industrial production: Euroland, Germany, the Czech […] More
New Overnight Developments Abroad - Daily Update
U.S. Jobs Friday
December 5, 2014
U.S. and Canadian November jobs figures get released at 08:30 EST (13:30 GMT). Ahead of such, the dollar is mostly firmer. Share prices rose overnight in Europe, commodities are softer, and 10-year German bund and Japanese JGB yields have edged lower. The dollar is 0.7% higher against the yen and comfortably above the 120 barrier […] More
Central Bank Watch
Central Bank of Brazil Selic Interest Rate Hiked to 11.75% from 11.25%
December 3, 2014
Brazil has been experiencing minimal growth but also inflation that’s higher than the 2.5-6.5% target. The central bank policy focus since April 2013 has been countering inflation. After rising 375 basis points from 7.25% to 11.0% in the ensuing year, monetary policy paused for several months until a 25-basis point increase on October 29 to […] More
