Foreign Exchange Insights and Next Week
Next Week
July 30, 2016
Central Banks: Monetary policy meetings in Australia, the U.K., Thailand, Romania and the Czech Republic. BOJ minutes will be published, and so will a new quarterly Reserve Bank of Australia Monetary Statement. Holidays: Markets are closed Monday in Canada for a Civic Holiday and Switzerland for the National Day. Purchasing Manager Surveys: Manufacturing: Australia, China, […] More
Central Bank Watch
Bank of Russia Keeps Interest Rate Steady at 10.5%
July 29, 2016
The Bank of Russia had reduced the rate in June, but according to its new statement, a paused decline in expected inflation led officials not to cut further this time. The statement, however, leaves the door open to more rate relief if, as they expect, inflation actually continues to decline. The 4% target is expected […] More
Central Bank Watch
Disappointing Bank of Japan Response
July 29, 2016
Market participants were expecting a more forceful Bank of Japan stimulus than was done. The Bank of Japan’s three-tier interest rate structure wasn’t changed. The macro add-on rate is zero. The Basic Balance rate is 0.10%. The BOJ policy rate is negative 0.10%. The program to increase bond purchases at a rate of 80 trillion […] More
Deeper Analysis
July in Figures
July 29, 2016
In July, the price of West Texas Intermediate oil plunged more than 10%, the 10-year British gilt yield dived 75 basis points, share prices around the world rallied strongly, and the dollar slipped moderately against a broad spectrum of other currencies. 10-Yr Yield 06/30/16 07/29/16 Chg v End-2Q U.S. 1.48% 1.45% -3 Basis Points Germany […] More
New Overnight Developments Abroad - Daily Update
Plenty of Disappointment to Go Around
July 29, 2016
Second quarter U.S. GDP growth of 1.2% was only about half as much as forecast, due mainly to a big drag from inventories. Canadian GDP sank 0.6% in May as industrial production there plunged 3.7% on month. The Bank of Japan produced less stimulus than hoped, limiting its action to an increase of EFT buying […] More
New Overnight Developments Abroad - Daily Update
Lessening Risk Perceived of a Fed Rate Hike in 2016
July 28, 2016
The FOMC statement was more ambivalent than many analysts had expected, even though labor market conditions were upgraded overall downside growth risks were said to have diminished. The dollar in response shows overnight losses of 0.7% against the yen and Swiss franc, 0.5% against the Australian dollar and euro, 0.3% versus the kiwi, and 0.2% […] More
Central Bank Watch
FOMC Statement
July 27, 2016
The Federal Open Market Committee left the federal funds rate target unchanged as expected at 0.25-0.50% and released a statement that upgraded labor market conditions but otherwise pretty much retained the same economic assessment. Unlike the previous mid-June result, the decision to leave policy unchanged was not unanimous. As she had done at meetings in […] More
Central Bank Watch
FOMC Not Expected to Change Interest Rate Today
July 27, 2016
No press conference is scheduled to follow today’s released FOMC policy statement due at 18:00 GMT (14:00 EDT), nor are policymakers likely to spring a surprise federal funds rate hike on the market. If that were to happen, an unscheduled press conference would be hastily arranged. The previous FOMC statement on June 14 occurred just […] More
New Overnight Developments Abroad - Daily Update
Sentiment Up Ahead of FOMC on Japanese Fiscal Indication and Apple’s 2Q Earnings
July 27, 2016
The FOMC will release a policy statement at 14:00 EDT (18:00 GMT). No rate hike is expected. Japanese Prime Minister Abe quantified the coming fiscal stimulus at a greater-than-expected JPY 28 trillion, or roughly $265 billion. However, it seems that only about half the total will involve “real money,” that is actual government deficit spending. […] More
Foreign Exchange Insights and Next Week
Mid-Summer Musing
July 26, 2016
A week from Thursday will mark the midpoint between the summer solstice and autumnal equinox. In theory, August is a sleepy month when investors and traders take their holidays. Historically, however, August has been hardly insulated from market volatility or the event risks. For example, both world wars began in late summer, and Iraq’s 1990 […] More
