Central Bank Watch
Another Official Cash Rate Cut in New Zealand
September 9, 2015
The OCR was reduced by 25 basis points for a third straight time. This reverses all but one of the similarly sized hikes between March and July of last year. More cuts are coming according to today’s statement: “A reduction in the OCR is warranted by the softening in the economy and the need to […] More
Larry's Blog
Earned Trust is a Fleeting Commodity
September 9, 2015
Never trust completely what you hear from financial market advisors. Decades of experience in this business have led me never to attach 100% or 0% probability to a forecast. Even the top guns in the business have been known to get the outlook entirely wrong, and as an example I came across in my files […] More
Central Bank Watch
Bank of Canada Maintains 0.50% Overnight Money Rate Target
September 9, 2015
The Board deliberates interest rate policy eight times per year and had cut the interest rate target at two of the five earlier meetings in 2015. Canada experienced a real GDP contraction in each quarter of the year’s first half. When the key rate was sliced July 15 to 0.50% from 0.75%, the action was […] More
New Overnight Developments Abroad - Daily Update
Enormous Rebound in Asian Equities
September 9, 2015
Amid hopeful speculation of new Chinese fiscal stimulus, the Shanghai Composite index closed 2.3%, and other stock markets in the region recorded even larger gains. Japan’s Nikkei jumped 1,343 points or 7.7%, the largest percentage daily advance since October 28, 2008, which was a corrective move in an otherwise bear market. Equities also advanced 4.2% […] More
Foreign Exchange Insights and Next Week
End-Summer Thoughts
September 8, 2015
Unusual properties to summer financial market activity subdivide foreign exchange trading into three uneven seasons. The unofficial summer for traders is bordered by the U.S. Memorial Day and Labor Day holidays. Without going into what makes the summer different, an important take-away is that it’s a time of year to be generally a little bit […] More
New Overnight Developments Abroad - Daily Update
Several Data Releases and a Mix of Market Responses
September 8, 2015
The unofficial post-summer currency market trading season began today and finds the dollar unchanged against the euro, dow 0.8% against the Australian dollar, 0.6% relative to sterling and 0.5% versus the kiwi but up by 0.5% relative to the yen and loonie and 0.2% vis-a-vis the yuan and Swiss franc. While the Japanese Nikkei plunged […] More
New Overnight Developments Abroad - Daily Update
Holiday Closures in the United States and Canada
September 7, 2015
Financial markets today will lack the leadership of North American participation due to Labor Day closures in the United States and Canada. The dollar is mixed, dropping 0.6% against sterling, 0.4% versus the Aussie dollar and 0.1% relative to the euro but advancing 0.4% against the kiwi, 0.3% vis-a-vis the yen, and 0.1% relative to […] More
Foreign Exchange Insights and Next Week
Next Week
September 4, 2015
Holidays: The United States and Canada observe their Labor Day holidays on Monday. G20 and Eurogroup Events: G20 finance ministers and central bank leaders wrap up their meetings on Saturday, September 5. Eurozone finance ministers meet Friday. Central Banks: Interest rate meets are scheduled next week in the U.K., Canada, New Zealand, Malaysia, Peru South […] More
New Overnight Developments Abroad - Daily Update
Global Risk Aversion Ahead of U.S. August Jobs Report
September 4, 2015
Stocks in the Pacific Rim fell 2.2% in Japan and Indonesia, 1.5% in Singapore and South Korea, 0.7% in Hong Kong, 0.5% in New Zealand and 0.2% in China. Stocks in Europe are down 2.4% in Italy, 2.1% in Germany, 2.2% in France, 1.8% in the U.K., 2.0% in Spain, and 1.5% in Switzerland. Today […] More
Deeper Analysis
Less U.S.-Advantageous PMI Spreads in August
September 3, 2015
In July when Grexit fever was at a high burn, the sum of the U.S.-minus-Eurozone purchasing manager survey differential had jumped to 6.6 points from 2.6 points the month before, but 80% of that increase was reversed in August. It was reported on Monday that the U.S. manufacturing PMI declined 1.6 points last month while […] More
