Central Bank Watch
Bank of Norway Cuts Deposit Rate to Record Low of 1.0%
June 18, 2015
Norway is an oil producer, and its economy was hard hit by the plunge in world oil prices after mid-2014 even though that dive has lately leveled off. A statement from Norges Bank Governor Olsen says that Norwegian growth has lately been weaker than expected. This not only justified today’s cut of 25 basis points […] More
Central Bank Watch
Swiss National Bank
June 18, 2015
As a perennial safe haven, the Swiss economy continues to grapple with the fallout of an overvalued currency related to global uncertainty including the five-year-long Greek debt crisis. Swiss monetary officials have resorted to negative interest rates and for several years imposed a cap with intervention on the Swiss franc’s euro cross rate. When that […] More
Central Bank Watch
Bank Indonesia
June 18, 2015
The released statement following this month’s Board of Governors’ meeting expresses satisfaction with the current monetary policy stance, anchored since February by a BI interest rate of 7.50%. Officials at the central bank believe the current interest rate structure meets their policy priorities: The decision is congruous with efforts to control inflation within the target […] More
New Overnight Developments Abroad - Daily Update
Many Factors for Investors to Digest
June 18, 2015
After the Fed’s decision and press conference, the dollar and sovereign debt yields fell, while share prices and commodities rose. The dollar lost further ground overnight, dropping 1.0% against the Australian dollar, 0.7% versus the yen, 0.6% vis-a-vis the loonie, euro and Swissie, and 0.5% relative to sterling. Against the pattern, the dollar also rose […] More
Central Bank Watch
FOMC Statement and Press Conference
June 17, 2015
Today’s statement and press conference identifies progress toward each of its mandates of full employment and 2.0% inflation in the PCE deflator occurred since its late April meeting but not enough to warrant an initial federal funds rate hike. The funds target range remains at 0.0-0.25%. A map was not supplied to know exactly when […] More
Deeper Analysis
New FOMC Projections
June 17, 2015
The Fed’s new forecasts cut projected growth ranges in 2015 but bump the ranges marginally higher for 2016 and 2017. The forecast for unemployment in 2015 is now higher; that for 2016 was left the same, and that for 2017 has edged up marginally. PCE inflation in 2015 and 2017 have the same predicted range […] More
Central Bank Watch
FOMC Preview
June 17, 2015
Federal Reserve officials have gradually modified their forward policy guidance, with three messages in mind: Policy will be data driven and not constrained to any pre-conceived timetable. The first rate hike would not occur before this June meeting but could happen anytime from that meeting onward. Once the first rate increase is done, subsequent changes […] More
New Overnight Developments Abroad - Daily Update
The June FOMC Meeting Has Arrived
June 17, 2015
This week’s FOMC decision (due today at 18:00 GMT) and Yellen press conference (starting 30 minutes later) have been eagerly awaited ever since monetary officials signaled that their data-driven policy could begin to raise the federal funds rate as early, but not before, the June meeting. Analysts are not expecting that to happen but are […] More
Foreign Exchange Insights and Next Week
Dollar Corrections Past and Present
June 16, 2015
I learned much about the interplay of market trends and temporary corrections within those trends from the dollar’s behavior between 1980 and 1985. My entire experience as a dollar watcher had been consistent more or less from the two devaluations while I attended graduate school through my ensuing career at the New York Federal Reserve. […] More
New Overnight Developments Abroad - Daily Update
Greek Default Risk Hangs over Markets Like a Dome
June 16, 2015
Share prices in Asia fell 3.0% in China, 2.1% in Hong Kong, 0.8% in Japan and Singapore and 0.7% in South Korea. Equities in Europe have lost a further 3.4% in Greece, 1.5% in Spain, 1.3% in Italy, 1.1% in Germany, 0.9% in France, and 0.5% in Great Britain. Greece’s creditors are not budging from […] More
