Central Bank Watch
Bank of Israel Cuts Interest Rate to 0.10% from 0.25%
February 23, 2015
The Bank of Israel has become the latest central bank to cut what already seemed to be a rock-bottom interest rate level. In each of the last four calendar years, monetary officials had implemented three rate cuts, each by 25 basis points and cumulating to a reduction of 300 basis points from 3.25% to 0.25%. […] More
New Overnight Developments Abroad - Daily Update
Firmer Dollar and Yen
February 23, 2015
The dollar is unchanged against the yen and yuan but stronger by 0.9% against the Swiss franc, 0.6% relative to the euro and Australian dollar, 0.4% versus the loonie, 0.2% vis-a-vis sterling and 0.1% the kiwi. Share prices rose 0.7% in Japan, 0.5% in Australia and 0.4% in South Korea but fell 0.9% in India […] More
Foreign Exchange Insights and Next Week
Next Week
February 20, 2015
Holidays: Chinese markets remain closed Monday and Tuesday for the Lunar New Year. Central Banks: Policy meetings in Israel, Hungary and Turkey. Released minutes from the Bank of Japan. Fed Chairperson Yellen delivers Humphrey-Hawkins semiannual testimony on the economy and policy before the Senate Banking Committee on Tuesday and the House Financial Services Committee on […] More
New Overnight Developments Abroad - Daily Update
Still Awaiting News on Greek Talks
February 20, 2015
Today is a self-imposed D-day on talks between the newly elected Greek government and its creditors. Led by Germany, the latter insist that Greece abide by all previously agreed policy conditions or aid will be shut off at the end of this month. The Greeks want a bridge loan, not a mere debt extension. Preliminary […] More
Central Bank Watch
ECB and FOMC Minutes
February 19, 2015
The ECB meeting of January 22 authorized quantitative easing totaling 60 billion euros per month over the twenty months to September 2016. This substantial loosening of monetary policy was taken in response to a weaker-than-hoped quantitative response by banks to initiatives launched last September, to newly arisen expectations of sub-zero CPI inflation “for some time,” […] More
New Overnight Developments Abroad - Daily Update
Market-Friendly News
February 19, 2015
FOMC minutes released late Tuesday revealed Fed policymakers are in no hurry to raise the fed funds rate, suggesting the first move may be closer to September than June. Concern centers on signal of tightening while inflation is close to 1%. Another worry is the Greek debt crisis. The ECB releases minutes of its January […] More
Deeper Analysis
Note on Oil, the Dollar, and Inflation
February 18, 2015
The genesis of this comment lies in the 1970s, not because of similarities between then and now but rather because the current period seems on anecdotal observation to be an inversion of then. There were two oil price shocks in the 1970s, a quadrupling of crude in early 1974 and a second sharp upward thrust […] More
Central Bank Watch
Bank of Japan Kept Same Policy Parameters
February 18, 2015
After meeting for a shorter-than-usual five hours and two minutes on Tuesday and Wednesday, the Bank of Japan left its monetary stance, consisting of a 0.0-0.1% overnight money range and asset purchases of JPY 80 trillion per year, consisting mainly of longer-term JGBs with the intent of expanding the average maturity of the central bank’s […] More
New Overnight Developments Abroad - Daily Update
Some Optimism about Greek Talks
February 18, 2015
An anonymous officials claims Greece will request an extension of the bailout program, but the devil is in the details. Germany suspects a semantic shift only and wants assurances that Greece is prepared to continue the mandated austerity. The situation is murky, but markets have today been inclined to assume an optimistic outcome rather than […] More
Foreign Exchange Insights and Next Week
Different Directions So Far in February
February 17, 2015
In this winter of discontent, Greek debt talks are commanding keen attention, but eurozone members, who presumably are susceptible to the forces of contagion have remained surprisingly insulated from market tension. The ECB’s 20-month-long purchase of EUR 60 billion of assets launches next month, and the Swedish Riksbank is the most recent monetary authority to […] More
