Central Bank Watch
Central Bank of Brazil Leaves Selic Rate at 14.25%
August 31, 2016
The Selic Rate has been 14.25% since a 50-basis point hike in July 2015 culminated 325 basis points between July 2014 and July 2015. The decision was unanimous by Copom, Brazil’s monetary policymaking committee. A released statement says, Taking into account the baseline scenario, the current balance of risks, and the wide array of available […] More
Central Bank Watch
No Colombian Interest Rate Hike this Month
August 31, 2016
By a 6-1 vote, the Board of the Central Bank of the Republic of Colombia agreed to leave its interest rate benchmark at 7.75%. That decision broke a string of 11 straight monthly hikes, nine by 25 basis points and two by 50 basis points. The dissenting vote wanted a 25-basis point increase. CPI inflation […] More
New Overnight Developments Abroad - Daily Update
End of August
August 31, 2016
Investors are less worried about European growth and more confident the Fed will lift rates soon at the end of the month than they were at the start of August. A lot of data was released on this final trading session of the month. The dollar is down 0.4% against sterling. Britain’s Nationwide house price […] More
New Overnight Developments Abroad - Daily Update
Approaching Monthend Brings Heavier Flow of Economic Data
August 30, 2016
The dollar remains firm on the anticipation of a federal funds rate hike in September, contingent of course upon a decent U.S. monthly jobs report due this Friday. Fed Vice Chair Stanley Fisher elaborated further on previous hawkish remarks, noting that the labor market is nearing full employment conditions. The dollar is 0.4% stronger against […] More
Central Bank Watch
Bank of Israel
August 29, 2016
Israel’s last central bank interest rate change occurred in February 2015. A 15-basis point cut then to 0.10% culminated 325 basis points of easing that had begun during 2011. This month’s statement from the bank of Israel notes that market-implied measures do not anticipate a rate hike before 2018, and the opportunity is not taken […] More
Deeper Analysis
Factors for the Fed to Consider
August 29, 2016
When the first and so far only federal funds hike of the current cycle was implemented last December, U.S. real GDP had only risen 0.9% at an annualized rate between the summer and autumn quarters. At the start of some previous tightening cycles, U.S. real GDP had advanced much more quickly than 0.9%, to wit […] More
New Overnight Developments Abroad - Daily Update
Continuing Reaction to the Fed’s Message from Jackson Hole
August 29, 2016
Investors are much more inclined to think a federal funds rate hike likely next month than before the slew of comments made at the Jackson Hole conference. In reaction, stocks and commodities are lower, and the dollar is mostly firmer. Dollar overnight gains amount to 0.3% against the yen, 0.2% versus sterling and the yuan […] More
Foreign Exchange Insights and Next Week
Focus to Shift From Fed Watching to Data Combing
August 26, 2016
In the week just ending, financial market participants were consumed with today’s scheduled speech by Janet Yellen at the K.C. Fed-sponsored Jackson Hole central banking symposium. The Fed Chair made some news by reporting progress toward the Fed goal of 2% inflation as well as its jobs growth mandate had occurred, and that the case for […] More
Foreign Exchange Insights and Next Week
Next Week
August 26, 2016
Central Banks: The annual Jackson Hole Symposium ends tomorrow. Monetary policy meetings are scheduled next week in Brazil, Israel and Colombia. Lacker and Kashkari are two of the Fed officials speaking publicly next week. So are DeBelle of the Reserve Bank of Australia and Nowotny of the ECB. British Holiday: Late summer bank holiday on […] More
New Overnight Developments Abroad - Daily Update
Rising Expectations of a Fed Rate Hike before Yearend
August 26, 2016
Today’s focus is on Janet Yellen’s address in Wyoming this morning. Ahead of that speech, markets are pricing more than even odds of a hike in the federal funds rate at one of the three remaining FOMC meetings this year and up to a 30% probability officials act at the September meeting. The dollar lost […] More
