Central Bank Watch
FOMC Preview
September 20, 2017
Eight weeks have elapsed since the last FOMC meeting at which time committee members signaled that a program of balance sheet normalization would commence “relatively soon.” The assessment of employment growth was upgraded then, but the discussion of economic conditions otherwise was little changed from the previous June 14th meeting. Since the July 26 meeting, […] More
New Overnight Developments Abroad - Daily Update
Natural Disasters, Manmade Disasters and Central Bank Meetings Top News
September 20, 2017
Puerto Rico is being hammered by a Cat 4 hurricane with 155 MPH winds. Mexico is reeling from a 7.2 magnitude earthquake that struck yesterday. Around 25o people confirmed dead. U.S. Republican senators are scrambling to pass a repeal and replace healthcare bill by monthend that’s even more dysfunctional than previous efforts. In a speech […] More
Foreign Exchange Insights and Next Week
The U.S. Current Account, the Dollar, and Real GDP Growth
September 19, 2017
The U.S. current account deficit, the broadest measure of net foreign demand, has been manageable in size and comparatively steady relative to GDP in the years since the Great Recession. The current account comprises trade in goods and services, net investment income, and transfer payments. As a percentage of nominal GDP, the deficit equaled 2.4% […] More
Central Bank Watch
Magyar Nemzeti Bank
September 19, 2017
Hungary’s central bank Base Rate was retained at 0.90%, but the overnight deposit rate was lowered to negative 0.15% from -0.05%. A released statement declared, The inflation target is expected to be achieved in a sustainable manner one additional quarter later, i.e. by the middle of 2019, following a delay of half a year indicated […] More
New Overnight Developments Abroad - Daily Update
Japanese Nikkei Plays Catch-Up after Holiday
September 19, 2017
As Japanese markets reopened following a 3-day holiday weekend, the Nikkei-225 leaped 390 points or 2.0%, moving back up the 20K level. But other stock markets did not follow suit. Equities elsewhere in the Pacific Rim closed down 0.5% in Singapore and Taiwan, 0.3% in Hong Kong, 0.2% in China and 0.1% in Australia, New […] More
Deeper Analysis
A Compelling Argument for the Fed to Stay the Course of Rate Normalization
September 18, 2017
This week’s Federal Open Market meeting is not expected to raise the 1.00-1.25% federal funds target but is nonetheless anticipated as an event that may shed many clues regarding future policy. The disconnection between a tightening labor market yet continuing sub-target inflation has kindled speculation that there may not be any further interest rate increases […] More
New Overnight Developments Abroad - Daily Update
Dollar Mixed, Gold Down, and Stocks Remain Well Bid
September 18, 2017
The dollar advanced by 0.4% against the yen and sterling, 0.3% versus the yuan, and 0.1% relative to the loonie and peso but slipped 0.2% vis-a-vis the kiwi and 0.1% against the euro and Swiss franc. The Aussie currency is steady. Gold dropped 0.5%, exceeding its two-week low, and WTI crude oil fell 0.2%. Japanese […] More
Foreign Exchange Insights and Next Week
Next Week
September 15, 2017
Central Banks: Monetary policy meetings next week will be held at the Federa Reserve, Bank of Japan, and in Norway, Hungary, South Africa, The Philippines and Indonesia. The FOMC meeting will update macroeconomic forecasts and be followed by Janet Yellen’s press conference. BOJ Governor Kuroda and Bank of England Governor Carney also will be speaking […] More
Central Bank Watch
Bank of Russia Eases
September 15, 2017
The fourth central bank interest rate cut of 2017 was made today, but the new policy rate level, 8.5%, still constitutes a “moderately tight stance” according to a released statement. Inflation now is close to the 4% target and well below the policy interest rate level. Furthermore, expected inflation has declined. However, officials do not […] More
Central Bank Watch
A 25-Basis Point Interest Rate Cut in Peru
September 15, 2017
Authorities at the Central Reserve Bank of Peru implemented the third 25-basis point cut of 2017 following moves in May and July. A released statement justifies this third cut, even in the face of higher inflation in August than July, by projecting a decline in trend inflation over coming months and noting both lower expected […] More
