Deeper Analysis
January in Figures
January 30, 2015
2014 got off to an extraordinarily volatile start in the marketplace, with huge declines in long-term interest rates, big gains in the yen and dollar, wide swings in equities not all in the same direction, a 9.4% drop in oil prices, and a recovery of 8.0% in the price of gold. The month saw huge […] More
Foreign Exchange Insights and Next Week
Next Week
January 30, 2015
Central Banks: Monetary policy meetings are scheduled in the U.K., Poland, Australia, Romania, India, Iceland and the Czech Republic. The Reserve Bank of Australia’s quarterly Monetary Policy Statement and the ECB’s monthly Bulletin will be published. Rosengren, Bullard, Kocherlakota, Lockhart, and Mester are Fed officials will scheduled public speaking engagements. Holidays: Super Bowl Sunday in […] More
Central Bank Watch
Central Bank of Russia Cuts Interest Rate to 15% from 17%
January 30, 2015
Russian consumer price inflation has catapulted higher, fed by the massive plunge of the ruble in the second half of last year. In December alone, prices jumped 2.6%, raising the on-year advance above 11%. From 5.5% a year ago, the Central Bank of Russia’s one-week auction rate was lifted by 150 basis points last March, […] More
New Overnight Developments Abroad - Daily Update
Barrage of Data and a Surprising Russian Interest Rate Cut
January 30, 2015
Russia’s one-week central bank auction rate was cut by 200 basis points to 15.0%. Such had been raised by 900 bps during November-December. Officials attribute the spike in inflation to ruble depreciation that will not continue and expressed concern about slowing growth. U.S. quarterly GDP growth slowed to 2.6% last quarter from 5.0% in 3Q. […] More
Central Bank Watch
Mexico’s Interbank Funding Rate Left at 3.0%
January 29, 2015
The Bank of Mexico’s benchmark interest rate has been 3.0% since a 50-basis point cut last June, which was the fourth reduction totaling 150 bps between March 2013 and then. A released statement after the first monetary policy committee meeting of 2015 reads similarly to the prior meeting’s statement, concluding The Governing Council has decided […] More
Central Bank Watch
South African Reserve Bank Interest Rate Left at 5.75%
January 29, 2015
There were two central bank repurchase rate increases in 2014: a 50-basis point hike in January and a follow-up 25-bp increase to 5.75% in mid-July. A released statement after the first scheduled policy meeting of 2015 adopts a wait-and-see attitude regarding how to respond to plunging oil prices that have significantly lowered the near-term projected […] More
New Overnight Developments Abroad - Daily Update
Dollar and Euro Charge Upward
January 29, 2015
The dollar edged 0.1% lower against the euro but has advanced 2.0% against the Swiss franc, 1.9% relative to the Aussie dollar, 1.0% vis-a-vis the kiwi, 0.9% against the loonie and 0.7% against the yen and sterling. The 10-year British gilt slipped four basis points and the 10-year German bund dipped a basis point. The […] More
Central Bank Watch
Reserve Bank of New Zealand
January 28, 2015
The latest Board meeting with a decision to keep New Zealand’s official cash rate at 3.5%, the level since the fourth straight 25-basis point hike lf 2014. The four increases, respectively in March, April, June and July, followed a three-year span with no change. Today’s statement was more dovish than the previous one because of […] More
Deeper Analysis
FOMC Statement
January 28, 2015
The January 27-28 monetary policy statement from the Federal Open Market Committee carried no dissents, unlike the previous statement in which R. Fisher, Plosser and Kocherlakota each had some sort of disagreement with the majority. The statement upgrades the pace of the economic expansion to solid, observes a further decline in labor market underutilization, predicts […] More
Central Bank Watch
Monetary Authority of Singapore Announces Unscheduled Tweak of its Currency Policy
January 28, 2015
Interest rate policy in Singapore is subordinated to a targeted exchange rate trading corridor, defined by a midpoint, a fixed trading bandwidth, and the slope of the corridor. Normally, policy is reviewed in April and October. However, after revising projected CPI inflation down a full percentage point to plus-or-minus 0.5% this year, officials flattened the […] More
