New Overnight Developments Abroad - Daily Update
A Convergence of Bond Yields
February 9, 2017
Ten-year sovereign debt yields fell 6, 5, and 3 basis points in Spain, Italy and France but rose 8 bps in Greece, 2 bps in the U.S. and U.K. and 1 bp in Germany. The dollar advanced 0.7% against the kiwi, which was depressed when the Reserve Bank of New Zealand’s policy statement left the […] More
Central Bank Watch
Reserve Bank of New Zealand: “A Decline in the Exchange Rate Is Needed”
February 8, 2017
New Zealand’s Official Cash Rate had stayed at 3.5% from July 2014 to the policy review in June 2015 but was subsequently halved in seven steps through the final meeting of 2016 in December. At this year’s first central bank meeting, the 1.75% OCR level was retained and upbeat assessments were expressed about the strength […] More
Central Bank Watch
National Bank of Poland
February 8, 2017
Poland’s 7-day repo rate has been at 1.5% since a 50-basis point cut in March 2015. Inflation has risen lately for reasons largely beyond the control of monetary policy. According to a released statement, “the risk of inflation persistently running above the target in the medium term is low” because of a negative output gap […] More
Central Bank Watch
Reserve Bank of India: No Rate Change and More Hawkish Statement
February 8, 2017
India’s Monetary Policy Committee failed to cut its interest rates, which many analysts had expected. There had been a cut in the reverse repo rate in December to 5.75% from 6.0% and cuts in both it and the repo rate of 25 bps last October. A drop in inflation seems transient. Therefore, a more hawkish […] More
Central Bank Watch
Bank of Thailand
February 8, 2017
There have been no central bank interest rate changes in Thailand since cuts of 25 basis points each in March and April of 2015. Six earlier such reductions had been spaced between November 2011 and March 2014. The latest policy review ended today with a unanimous vote to keep the interest rate at 1.5%, which […] More
Central Bank Watch
Inflection Point in Icelandic Monetary Policy
February 8, 2017
The Monetary Policy Committee retained a 5.0% seven-day repo rate but released a statement that projects rising demand-side pressures, a possibly tighter labor market, and seemingly redirects the bias of policy from ease toward restraint. Economic growth was around 6% last year compared to the Bank’s assumption made last November of 5%. The last two […] More
New Overnight Developments Abroad - Daily Update
Significant Further Drop in Sovereign Debt Yields
February 8, 2017
Ten-year sovereign debt yields are down five basis points in Germany, Spain, Italy and the U.K. and by 3 bps in U.S. Treasury futures. The dollar firmed 0.1% against the euro overnight but is otherwise slightly lower, having slipped 0.4% against the yen, 0.3% relative to the Canadian currency and Mexican peso, 0.2% against the […] More
Central Bank Watch
Central Bank of Sri Lanka
February 7, 2017
Fifty-basis point increases in Sri Lanka’s central bank lending and deposit rates last February and July reversed half of the previous cumulative easing engineered from October 2012 to April 2015. The hikes in 2016 were done to curb excessive demand in order to pre-empt escalation of inflationary pressures and also to support the country’s balance […] More
Central Bank Watch
National Bank of Romania Keeps 1.75% Interest Rate
February 7, 2017
Romania’s 25-basis point central bank rate reduction in May 2015 was its ninth and last such cut since the start of 2014. The latest monetary policy review observed inflation to still lie below zero and sees a somewhat less inclining uptrend than imagined before “due mainly to new disinflationary supply-side shocks that emerged from November […] More
Central Bank Watch
Reserve Bank of Australia: No Change
February 7, 2017
The central bank Board holds eleven policy meetings each year, skipping only January, which is mid-summer down under. So after a two-month break, officials made the same decision that had been reached at the four final reviews in 2016 by leaving the Official Cash Rate unchanged at a record low of 1.50%. There were two […] More
