Central Bank Watch
Bank of England
December 15, 2016
A statement following the latest meeting of the Monetary Policy Committee reveals that policymakers voted unanimously to retain present policy parameters: a 0.25% Bank Rate, an incremental GBP 60 billion program of gilt purchases bringing such to a new limit of GBP 435 billion, and the planned purchase of GBP 10 billion of corporate debt. […] More
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Bank Indonesia
December 15, 2016
From 6.25% at the start of 2016, the BI seven-day reverse repo rate was cut by 25 basis points each in January, February, March, June, September and October to the current level of 4.75%, which was held steady at this month’s meeting. The next meeting will be in February, as January is always skipped. Today’s […] More
Central Bank Watch
Bank of Korea
December 15, 2016
Four 25-basis point interest rate cuts from August 2014 to June 2015 were followed more recently by yet another 25-bp reduction in June of this year. South Korea’s 7-day repo rate now stands at 1.25%, a record low. A policy statement released today. South Korea is sustaining only modest growth, and inflation is low with […] More
Central Bank Watch
Bank of Norway Keeps 0.5% Interest Rate and Signals No Likely Change for Quite a While
December 15, 2016
Three 25-basis point interest rate cuts were administered between June 2015 and March 2016. Policy since then has remained unchanged. Macroeconomic trends might justify further easing but housing market imbalances and external uncertainties argue otherwise. Changes in the outlook for inflation and capacity utilization imply, in isolation, a somewhat lower key policy rate in the […] More
New Overnight Developments Abroad - Daily Update
Broad Financial Market Adjustments Intensify in Wake of FOMC Meeting
December 15, 2016
The dollar gained overnight by another 2.0% against the Australian dollar, 1.5% versus the euro, 1.6% vis-a-vis the kiwi, 1.2% relative to the yen, 0.9% against sterling, and 0.6% versus the yuan. Key levels are being approached such as parity with the euro, 120 yen, and 7 renminbi. Throughout the 8-year Obama stewardship, Republicans fought […] More
Foreign Exchange Insights and Next Week
Stocks and Commodities Fell, while Dollar and Treasury Yields Rose During Yellen Press Conference
December 14, 2016
The success of a press conference is often measured by whether such elicited a positive market response. That didn’t necessarily happen today. The conference ended at 15:21 EST, a shade sooner than the usual full hour taken. Comparing market levels then to those just before the FOMC statement was released at 14:00 EST, the dollar […] More
Central Bank Watch
Fed Funds Target Raised by 25 Basis Points as Expected
December 14, 2016
The Federal Open Market Committee agreed unanimously to raising the interest rate target range to 0.5-0.75%. The released statement speaks of moderate growth but with continuing soft business investment. Note is made of a strengthening labor market and rising inflation, which is projected in newly released forecasts to be 1.9% next year and at the […] More
Central Bank Watch
Central Bank of Iceland Eases Somewhat Unexpectedly
December 14, 2016
The seven-day deposit rate was cut to 5.0% from 5.25%. Although the rate had be reduced by 50 basis points in August, today’s action was somewhat surprising as growth has been strong. In a released statement, officials note that the strength of the krona influenced this second rate reduction of 2016. Inflation measured 2.1% in […] More
Central Bank Watch
FOMC Preview
December 14, 2016
The last FOMC meeting occurred right before the U.S. election result heard round the world. Trump’s unanticipated victory and the broad-based policy changes that he intends to pursue have also produced unexpected market moves. Stocks are sharply higher. Sovereign debt yields have risen even more dramatically. The dollar has rallied especially against the yen. Oil […] More
New Overnight Developments Abroad - Daily Update
Awaiting a Likely Fed Rate Hike and Yellen’s Press Conference
December 14, 2016
The Fed’s announcement is due at 14:00 EST (19:00 GMT). A rate hike is like for the first time in a year. Chair Yellen’s press conference starts 14:30 EST. New forecasts will be unveiled. The dollar is down 0.3% against the euro and yen. Ten-year sovereign debt yields fell overnight by six basis points in […] More
