New Overnight Developments Abroad - Daily Update
Markets Sustained by a Belief that Help is on the Way
August 12, 2016
Investors are confident that central banks won’t let bad things happen. The Central Bank of Chile kept a 3.5% interest rate benchmark and dropped language about future rate normalization. Like many other monetary authorities except perhaps the Fed, plans to tighten are getting delayed and in many cases like the Bank of England and BOJ […] More
Central Bank Watch
Bank of Mexico
August 11, 2016
Having cut its policy rate at the prior meeting on June 30 by 50 basis points, today’s decision not to change monetary policy further at this time was expected. A released statement noted slower growth and projected that policy is consistent with the targeted 3% inflation in 2017. If Donald Trump is elected U.S. president in […] More
Uncategorized
National Bank of Serbia Leaves Policy Rate at 4.0% and Expresses More Optimism
August 11, 2016
Serbia’s central bank policy rate had been halved in nine steps between March 2015 and July 2016 from 8.0% to 4.0%. Officials saw no need to ease further at the August review. Serbian inflation, foreign rates of inflation, and domestic aggregate demand are projected to rise. Serbia is considered more immune from external shocks because of […] More
Central Bank Watch
Bangko Sentral ng Pilipinas: Reverse Repo Rate to Stay at 3.0%
August 11, 2016
The overnight lending and deposit rates in The Philippines were left unchanged at 3.5% and 2.5%, a corridor that straddles the reverse repo rate of 3.0%. The narrow rate band replaced a wider 4-6% corridor that had been maintained since a 25-basis point hike in September 2014. There was also a 25-bp increase in July 2014, no […] More
Central Bank Watch
Bank of Korea
August 11, 2016
South Korea’s Base Rate, which had been cut in June for the first time in a year but was left unchanged after July’s monthly policy meeting, was again not changed following the latest review. A statement again reaffirmed the view that inflation, now under the 1-3% target range at 0.7%, will continue to be low for […] More
New Overnight Developments Abroad - Daily Update
Softer Kiwi after New Zealand Rate Cut
August 11, 2016
The dollar advanced 0.4% against the New Zealand dollar, 0.3% versus the euro, yen and sterling, and 0.1% relative to the Swiss franc, Aussie dollar and yuan. The greenback is 0.1% lower against the loonie. New Zealand’s official cash rate was sliced 25 basis points to a record low of 2.0%. The drop had been […] More
Central Bank Watch
New Zealand’s Official Cash Rate Sliced 25 Basis Points to 2.0%
August 10, 2016
Four sentences from a statement released by the Reserve Bank of New Zealand explain why the OCR was cut today and the likely direction of the next interest rate change. Weak global conditions and low interest rates relative to New Zealand are placing upward pressure on the New Zealand dollar exchange rate. Headline inflation is being […] More
Larry's Blog
Gun Control and the Second Amendment
August 10, 2016
Today’s press is full of editorials about Donald Trump’s allegedly coded suggestion that gun owners take matters into their own hands to prevent Hillary Clinton from becoming president by exercising their second amendment rights, as Giuseppe Zangara tried to do to President-Elect Roosevelt in February 1933. Subsequently, Sirhan Sirhan in June 1968 and Arthur Bremer in […] More
New Overnight Developments Abroad - Daily Update
Lower Dollar as Hopes Dim over Nearness of Next Federal Reserve Rate Hike
August 10, 2016
Today’s main financial theme is the persistent weakness of global growth. The 10-year British gilt yield fell six basis points to a new record low of 0.52% in the U.K. versus 1.43% at the end of May. Ten-year German bund and Japanese JGB yields are 2 basis points lower and each quite negative at -0.10% […] More
Central Bank Watch
Reserve Bank of India Keeps Existing Policy Settings
August 9, 2016
A statement released after the third bi-monthly policy review retained the repo rate at 6.0%, the reverse repo at 6.0%, and the cash reserve requirement at 4%. This was the final meeting led by Governor Raghuram Rajan, who completes his 3-year term next month. Some concern is expressed about the potential for rising core inflation in […] More
