Central Bank Watch
Quarterly Review of Swiss Central Bank Policy Leaves Stance Unchanged
September 17, 2015
The Swiss deflation problem was aggravated by renewed weakness in world oil prices. Consumer prices fell 1.4% between August 2014 and August 2015, and economic growth in the first half of 2015 was virtually flat, with a a drop in the first quarter reversed by slightly positive growth in the spring. With interest rates near […] More
Central Bank Watch
Bank Indonesia Keeps the BI Interest Rate at 7.5%
September 17, 2015
Indonesia has been battling comparatively high CPI inflation for some time. In 2013 a string of BI rate hikes raised such by 175 basis points between June and November, and another 25-basis point increase one year later brought the benchmark up to 7.75%. Indonesia also has experienced a slowdown in growth, which dropped below the […] More
New Overnight Developments Abroad - Daily Update
Narrowly Mixed Dollar Ahead of FOMC Decision
September 17, 2015
There’s been an 8.3 earthquake off the coast of Chile and an ensuing tsunami. In last night’s Republican debate, Trump’s rivals escalated their attacks on the front-runner. This FOMC day could produce the first federal funds rate hike since a 25-basis point increase in June 2006, so there’s excitement in the air. A Janet Yellen […] More
Larry's Blog
Some Fundamental Beliefs
September 16, 2015
It’s been 49 years since I first studied economics and 40 years since I worked as an analysts in the Foreign Department of the New York Federal Reserve Bank. Here’s a list — alas incomplete – of core beliefs acquired as a currency market watcher. Currency movements are often very counter-intuitive, and a single ill-advised […] More
Central Bank Watch
The Bank of Thailand Interest Rate Left Unchanged
September 16, 2015
There have been nine cuts of the one-day repo rate since November 2011, most recently in March and April of this year. The current level, 1.50%, is just 25 basis points above the 66-year low hit in the Great Recession. Thai monetary officials in their latest statement following a unanimous decision to keep policy unchanged […] More
New Overnight Developments Abroad - Daily Update
China Stocks Up, OECD Growth Forecasts Revised, and U.S. and Eurozone CPI Data Released
September 16, 2015
A 5% jump in China’s stock market led equities higher overnight, with other gains amounting to 2.3% in Hong Kong, 2.0% in South Korea, 1.6% in Australia, 1.0% in India, 0.8% in Japan, 0.9% in Taiwan, and so far 1.5% in Spain, 1.0% in Italy, 2.1% in Greece, 0.7% in Germany, 0.8% in Switzerland, and […] More
Central Bank Watch
Central Bank of Chile Flags Coming Interest Rate Hike
September 15, 2015
The Central Bank of Chile left its benchmark interest rate, which has been at 3.0% since a cut in October 2014, unchanged but released a statement forewarning markets that policy will be tightened as soon as the next meeting: The Board considers that the convergence of inflation to 3% over the policy horizon will call […] More
Central Bank Watch
Bank of Japan
September 15, 2015
The statement released this month by the BOJ Board after 5 hours 36 minutes of policy deliberations over two days break little new ground regarding whether policy stimulus might be augmented, as such was at end-October 2014, following next month’s full outlook review. The assessment of exports and industrial production were downgraded, but the upbeat […] More
New Overnight Developments Abroad - Daily Update
Dollar Little Moved by U.S. and Other Data
September 15, 2015
The dollar shows no net overnight movement against the euro, yuan and loonie, a rise of 0.3 against the Aussie dollar and sterling, a gain of 0.2% and 0.1% versus the kiwi and Swissie, and a drop of 0.2% relative to the yen. Chinese share prices slumped 3.5%, and there were stock market declines of […] More
Deeper Analysis
Should the Fed Hold or Should it Raise?
September 14, 2015
Editorials this past weekend in the Financial Times and The Economist argue that the U.S. central bank should leave the federal funds target range at 0-0.25% at this week’s FOMC meeting. The FT makes the point that the Great Recession shook up economic structures sufficiently so as to cast doubt on how to interpret signs […] More
