Deeper Analysis
January 2019 in Figures
January 31, 2019
Equities rebounded sharply in January from their December slump, and the price of crude oil (West Texas Intermediate) soared 18.2%. There were no central bank policy rate changes among the major economies surveyed in this monthly feature, but the Federal Reserve signaled a shift from rate normalization to one of patience with no more increases […] More
Central Bank Watch
Central Bank of Chile Lifts Policy Rate
January 31, 2019
The Central Bank of Chile engineered a second 25-basis point in its monetary policy rate to 3.0%. The initial rate hike of similar size had been done in October. The rate’s last cyclical low of 2.5% had prevailed from May 2017 through October 2018. Chilean CPI inflation now of 2.6% is a half percentage point […] More
New Overnight Developments Abroad - Daily Update
Short-Lived Fed Stockmarket Rally
January 31, 2019
The FOMC’s tightening pause gave a big boost to U.S. stocks yesterday and was augmented by some better-than-expected corporate earnings. But the DOW fell in the first hour of U.S. trading, and share prices have also weakened today in Germany France, and Australia. This contrasts with gains close to 1% in China, Hong Kong and […] More
Deeper Analysis
Powell’s Press Conference
January 30, 2019
Fed Chairman Powell’s press conference reinforced the significant change in monetary policy forward guidance contained in the formal statement released today by the Federal Open Market Committee. He declined to agree that the current hold on further near-term changes in the federal funds target is merely a “pause in a tightening cycle,” conceding instead that […] More
Central Bank Watch
Today’s FOMC Statement on Monetary Policy – Analysis
January 30, 2019
Today’s statement accelerated the shift in forward guidance rate directionality away from a one-sided risk toward less accommodation and greater normalization by introducing an element of two-sided risk and less certainty about the timing and number of increases if such should be deemed appropriate. The prior statement on December 19 had added the bolded word “some” […] More
Central Bank Watch
FOMC Preview
January 30, 2019
The first rule of Federal Reserve chairmen when wearing their communicator-in-chief hat is to do no harm. Chairman Powell failed that test at December’s press conference by placing a very positive spin on U.S. economic trends and appearing not to back away from a baseline expectation that the a couple more interest rate hikes in 2019 […] More
New Overnight Developments Abroad - Daily Update
Brexit Mess, An FOMC Announcement, and Some Weak Data Reports
January 30, 2019
Last night’s British parliamentary votes produced an ill-advised win for Prime Minister May, rejecting a no-deal option or a second referendum in favor of authorization for the prime minister to attempt a renegotiation of parts of her agreement with the rest of the EU. Those governments have repeatedly ruled out renegotiation, so a no-deal Brexit […] More
Central Bank Watch
National Bank of Hungary
January 29, 2019
Although leaving Hungary’s central bank base rate (0.90%) and overnight deposit rate (-0.15%) unchanged at their cyclical lows, officials at Magyar Nemzeti Bank are now contemplating a policy trend reversal, affecting both its quantitative stimulus and these key interest rates. The Monetary Council is prepared for the gradual and cautious normalization of monetary policy, which […] More
New Overnight Developments Abroad - Daily Update
Important Decisions Later Today in the Long Brexit Saga
January 29, 2019
The major dollar relationships have moved 0.2% or less overnight. President Trump’s State of the Union Address has been reset for February 5th. Originally, it would have been today but was delayed because of the federal government shutdown. That leaves today’s major object of market attention fixed on Britain’s Parliament, where a series of votes […] More
New Overnight Developments Abroad - Daily Update
Political Strains Batter Equities Again
January 28, 2019
Prospects weakened over the weekend for a border security deal between President Trump and Congressional Democrats by the February 15th deadline. The president attaches less than even odds to that happening and insists that a wall will be built. The negotiation of withdrawal terms for Brexit is going nowhere. The EU rejects any renegotiation of […] More
