Foreign Exchange Insights and Next Week
Next Week’s Menu (September 21-27, 2019)
September 20, 2019
Central Banks: Monetary policies to be reviewed in New Zealand, Hungary, the Czech Republic, Thailand, Mexico and the Philippines. Minutes from the Bank of Japan’s July Board meeting get published. Williams, Kaplan, Kashkari, and Bullard of the Fed speak publicly, and so do BOJ Governor Kuroda, Bank of England Governor Carney, and Masai of the […] More
New Overnight Developments Abroad - Daily Update
Big Rise in Indian Share Prices, Marginal Change in China’s 1-Year Loan Rate, and Continuing Strain in U.S. Bank Funding Market
September 20, 2019
India’s stock market shot up 5.3%, its greatest one-day rise in a decade, after an announced cut in the country’s corporate tax rate to 25.75% from 30%. Other stock markets around the world showed only modest net movement and mostly upward in direction. The dollar and 10-year sovereign debt yields likewise remained generally steady overnight. […] More
Central Bank Watch
Bank Indonesia Rate Cut
September 19, 2019
At Bank Indonesia, a third consecutive 25-basis point cut was announced today in the seven-day reverse repo rate, which becomes 5.25%. Overnight lending and deposit rates were similarly cut by a quarter percentage point. Like the reductions at meetings in July and August, today’s as-expected preemptive action is meant to promote sustained growth with external […] More
Central Bank Watch
Norges Bank Tightened But Maybe for Last Time
September 19, 2019
Norway has the only central bank in the Group of Ten that’s still raising interest rates. A fourth 25-basis point policy rate hike was engineered today at the Bank of Norway, following earlier such increases in September 2018 and March and June of this year. That said, officials today strongly suggested that this string of […] More
New Overnight Developments Abroad - Daily Update
Eight More Central Bank Meetings, a U.S. Current Account Report, and Downgraded Global Growth
September 19, 2019
Dollar movement overnight was mixed, with gains against the Australian dollar, kiwi, sterling, and yuan but losses relative to the yen, Swiss franc, euro, loonie and peso. The 10-year U.S. Treasury and Japanese JGB yields fell three basis points. Their German and British counterparts are respective a basis point higher and a basis point lower. […] More
Central Bank Watch
Central Bank of Brazil’s Selic Interest Rate Lowered 50 basis points to 5.50%
September 18, 2019
Copom, the monetary policy committee at Brazil’s central bank engineered its second 50-basis point interest rate cut of 2018 on Wednesday, but this was only the latest in an extensive easing cycle. The Selic rate was at 14.25% prior to October 2016, 875 basis points higher than the new level. All but 200 basis points […] More
Deeper Analysis
Takeaways from Jerome Powell’s Press Conference
September 18, 2019
Fed Chairman Powell didn’t say anything particularly surprising at today’s press conference. His answers to a wide rage of questions, some on awkward topics like the one-directional abusive criticism of the Fed coming from the White House, were predictable on several levels. His comments adhered to long-established Fed stances such as the data dependency of […] More
Uncategorized
FOMC Statement and Updated Forecasts
September 18, 2019
The federal funds target range as expected was lowered another 25 basis points to 1.75-2.0%. In the opening paragraph of the FOMC statement that describes economic conditions, investment and export demand were dowgraded to “have weakened,” while personal consumption was upgraded to a stronger pace. Similar to the statement at end-July when the initial easing was […] More
Central Bank Watch
FOMC Preview
September 18, 2019
In the seven weeks since the Federal Open Market Committee authorized the first federal funds target decline since December 2008, the 10-year treasury yield had dropped 27 basis points on balance, but there has been scant net change in EUR/USD, dollar/yen, U.S. share prices or the price of oil. The rate reduction on July 31 […] More
New Overnight Developments Abroad - Daily Update
Fed Expected to Announce Interest Rate Cut Today But Forward Guidance Uncertain
September 18, 2019
Investors will be focused not on what actions the Fed implements today but rather on what is said about future monetary policy where FOMC voting members appear divided. Macroeconomic forecasts will be updated, and Chairman Powell will hold a press conference afterward. The dollar has been decently bid today, with gains overnight amounting to 0.4% […] More
