Deeper Analysis
September and the Third Quarter in Figures
September 30, 2019
A well-bid dollar in the third quarter correlated with lesser gains in U.S. equity prices than in the stock markets of Germany and Japan. Despite intensifying White House complaints that the Fed isn’t cutting U.S. interest rates enough, two reductions of the federal funds target were engineered in the quarter totaling 50 basis points. In […] More
New Overnight Developments Abroad - Daily Update
Typical Monthend Deluge of Data
September 30, 2019
On this final day of September and the third quarter, the dollar and sterling rose somewhat against other major currencies. The dollar is up 0.5% against the Swiss franc, 0.4% relative to the euro and kiwi, 0.3% vis-a-vis the yuan, 0.2% versus the Australian dollar and peso and 0.1% against the yen and loonie. Sterling […] More
Foreign Exchange Insights and Next Week
Next Week: September 28-October 4, 2019
September 27, 2019
Central Banks: Monetary policy reviews are planned in Australia, India, Poland, Romania, and Iceland. The Bank of Japan’s influential quarterly Tankan survey of corporate conditions and expectations will be published, and so will a summary of this month’s BOJ Board meeting. A slew of Fed officials with public speaking engagements next week features Chairman Powell […] More
Central Bank Watch
Bank of Mexico Cuts Overnight Interbank Rate Again
September 27, 2019
Late yesterday came news that the Bank of Mexico had reduced its overnight interbank rate by 25 basis points for a second straight month. The rate level now becomes 7.75%. These moves reverse 100 basis points of policy tightening in 2018, and more cuts seem likely soon. According to a released statement, five of seven […] More
New Overnight Developments Abroad - Daily Update
Trade Talks Back in the Spotlight
September 27, 2019
A number of factors could have made Friday an ugly day in the marketplace — the U.S. and British political crises, weak European and U.S. data, and Japanese disinflation. But instead, the mood has been lifted by the announcement that U.S. and Chinese trade delegations will restart formal talks in Washington on October 10th. Share […] More
New Overnight Developments Abroad - Daily Update
Watching Impeachment Developments and Digesting Data
September 26, 2019
The dollar fell overnight by 0.5% against the kiwi, 0.4% relative to the Aussie dollar, and 0.1% versus the yen and loonie, but it also rose 0.2% against sterling and the euro as well as 0.3% vis-a-vis the Swiss franc. The yuan and peso are unchanged. Wednesday’s rebound in U.S. share prices carried over into […] More
New Overnight Developments Abroad - Daily Update
Dollar Up and Stocks Down as Impeachment Inquiry Opens Against Trump
September 25, 2019
House Speaker Pelosi ended her previous resistance to calls for Trump’s impeachment, raising the political risks to both Democrats and Republicans. The United States and Great Britain, which led the free world’s fight against fascism in the 20th century, are now both enmeshed in constitutional crises. Equities fell overnight by 1.3% in South Korea and […] More
Deeper Analysis
Impeachment and the U.S. Stock Market: Historical Precedents
September 24, 2019
A decline today in U.S. share prices has been attributed in part to a rising perceived risk that impeachment proceedings will be brought against President Trump. In the flexible dollar rate era, only two presidential impeachment events have occurred, and the performance of the U.S. stock market in those two examples could hardly be more […] More
New Overnight Developments Abroad - Daily Update
Difficult Day in the U.K.
September 24, 2019
The Brexit crisis deepened today as the highest British court ruled unanimously that Prime Minister Johnson’s suspension of parliament was illegal. Just 37 days remain before the current October 31 deadline by which a Brexit deal must be worked out by the Johnson’s government, which at the moment appears highly improbable. On the data front, […] More
New Overnight Developments Abroad - Daily Update
New Evidence of Europe Sliding Closer to Recession
September 23, 2019
Preliminary purchasing manager September survey results for the euro area, Germany, and France reflect a further quantum loss of economic momentum, which is most pronounced in manufacturing but spreading also now into the service sectors. Share prices in response have so far dropped 1.1% in Italy, 1.0% in Germany and Spain, 0.9% in France and […] More
