Deeper Analysis
May in Figures
May 31, 2016
In May, long-term interest rates fell. On the monetary policy front, confidence climbed that the Federal funds rate would be raised before much longer, while speculation grew that more stimulus would be forthcoming in Japan and possibly the eurozone. An appreciation of the dollar and oil prices was balanced by a decline in gold. Most […] More
New Overnight Developments Abroad - Daily Update
Typical Deluge of Data as Another Month Ends
May 31, 2016
Market Highlights: The U.S. dollar dropped 1.1% and 0.9% against the Australian and New Zealand dollars on encouraging economic statistics released today. Against other major currencies, the U. S. dollar is narrowly mixed but poised to record a very strong monthly advance. The Shanghai Composite index of Chinese share prices leaped 3.3%. The cause was […] More
New Overnight Developments Abroad - Daily Update
A Lot to Ponder in Spite of U.S. and British Holiday Closures
May 30, 2016
U.S. markets will be closed for Memorial Day, the unofficial start of summertime currency trading. London markets are shut, too, for the late May Bank holiday. At the summit of G7 leaders held in Japan, a mixed agreement was reached not to engage in competitive devaluation but also protesting excessive exchange rate volatility. Japan’s prime […] More
Central Bank Watch
Central Bank of Colombia Raised Interest Rates Again in Inflation-Reducing Campaign
May 29, 2016
Colombian monetary officials late Friday announced a further interest rate hike of 25 basis points to 7.25%. It was the ninth increase since September 2015. The rate was at 4.50% prior to then. A statement justified the action as follows: The Colombian economy is adjusting in an orderly manner to the strong external shocks recorded […] More
Foreign Exchange Insights and Next Week
Next Week
May 27, 2016
Central Banks: Central Bank of Iceland and European Central Bank hold policy meetings. ECB President will preside over a press conference, and new macroeconomic forecasts are due. The Fed releases its Beige Book, and Kaplan, Evans, Bullard and Powell are Fed officials with speaking engagements in the week. Holidays and Special Releases: U.S. and British […] More
New Overnight Developments Abroad - Daily Update
Waiting for Yellen
May 27, 2016
Markets await clarification of FOMC policy when Chair Yellen speaks today at Harvard. The dollar rose 0.5% against the loonie but is otherwise very narrowly mixed. West Texas Intermediate oil and Comex gold fell by 0.7% to $49.12 per barrel and 0.2% to $1,217.80 per ounce. The 10-year German bund yield is two basis point lower […] More
Central Bank Watch
Fourth Ukraine Central Bank Interest Rate Cut in Nine Months
May 26, 2016
The National Bank of Ukraine Board announced a one percentage point reduction in its key interest rate to 18%, which was smaller than cuts of 3 percentage points (ppts) in August 2015, 5 ppts in September 2015, and 3 ppts in April 2016. A statement explaining today’s decision speaks of continuing disinflation due to the […] More
New Overnight Developments Abroad - Daily Update
Firmer Commodity Prices
May 26, 2016
Crude oil (+0.7%) and a wide spectrum of industrial metal prices firmed overnight. WTI touched a high of $49.97 per barrel, and brent surpassed $50.00. St. Louis Fed President James Bullard is the latest Fed official to indicate that a June interest rate hike may be in play. He spoke of tightening U.S. labor market […] More
Central Bank Watch
Bank of Canada
May 25, 2016
The Canadian central bank overnight interest rate target was left unchanged as expected. It’s been 0.50% since the second of two 25-basis point cuts last July. The first one was done in January, and those were the only changes since a trio of consecutive tightenings in June, July and September of 2010. A statement explaining […] More
New Overnight Developments Abroad - Daily Update
Several Pieces of Good News
May 25, 2016
Yesterday’s strong performance in North American equities carried over into Pacific Rim and European markets today. Japan’s Nikkei closed 1.6% higher. Shares also climbed 2.7% in Hong Kong, 2.3% in India, 1.5% in Australia, 1.3% in Indonesia, 1.2% in South Korea and Taiwan and 0.7% in New Zealand. The Shanghai composite index dipped 0.2%, however, […] More
