Deeper Analysis
October in Figures
October 31, 2019
The intensification of risk related to U.S.-Sino trade talks and Brexit that happened in September receded partly in October. Monthend came and went without the U.K. leaving the EU either with or without a deal, and sufficient progress in the trade talks forestalled the threat of sharp tariff increases at least for a while. Impeachment […] More
Central Bank Watch
Bank of Japan Leaves Policy Settings as Is but Cuts Projected Growth and Inflation
October 31, 2019
The Bank of Japan’s latest policy review, a meeting lasting five hours and 18 minutes over two days, produced no change in policy settings: a negative 0.1% short-term policy interest rate, a targeted 10-year JGB yield of “around zero percent,” and plans to buy about JPY 80 tln of JGB’s annually. This month’s policy review […] More
New Overnight Developments Abroad - Daily Update
Soft Economic Data and China Balking on a Long-Term Trade Deal
October 31, 2019
Equity markets today are down 1.1% in India, 0.9% in the U.K., and 0.4% in China and Australia. 10-year sovereign debt yields also reflect a more cautious investor mood. Canada’s 10-year yield tumbled 15 basis points on Wednesday. Today, the 10-year German bund and British gilt yields are down 5 bps, and the U.S. Treasury […] More
Central Bank Watch
Third Brazilian Rate Cut of the Cycle
October 30, 2019
The Central Bank of Brazil’s Selic Rate was cut 50 basis points to 5.0%. The decision was unanimous and followed 50-bp reductions announced July 31 and September 19. In a released statement, the policymaking committee characterized core inflation as comfortable. The Committee judges that this decision reflects its baseline scenario for prospective inflation and the […] More
Deeper Analysis
Fed’s Pause to Last Longer Than Average
October 30, 2019
Coming into today’s FOMC announcement and press conference, Fed watchers correctly coalesced around a view that the Fed would chop 25 basis points off its federal funds rate target for the third time since July 31 but at the same time signal a pause in this easing cycle. The released statement didn’t discredit that presumption. […] More
Central Bank Watch
FOMC Statement Introduces More Ambiguity in Forward Guidance
October 30, 2019
A key sentence after the previous two rate cuts announced on July 31 and September 18th had read, “As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain […] More
Central Bank Watch
Bank of Canada’s Overnight Interest Rate Target Left at 1.75%
October 30, 2019
The 1.75% overnight central bank interest rate in Canada constitutes a post-Great Recession high and has been at that level since an increase in October 2018. Officials consider that rate level still appropriate and noted today a number of resilient elements in Canada’s economy related to the labor market, household income trends, and housing. But […] More
Central Bank Watch
FOMC Preview
October 30, 2019
Today’s FOMC statement will be released in just under two hours. Analysts are widely looking for a third straight 25-basis point cut of the federal funds target to 1.50-1.75 percent. Six weeks ago right after the second consecutive reduction, they had been less confident than now that a cut would be agreed upon at today’s […] More
New Overnight Developments Abroad - Daily Update
Markets Anticipating Another Fed Rate Cut
October 30, 2019
The dollar marked time overnight as investors await confirmation of further easing from the FOMC. Their expectation of a third 25-basis point reduction since July 31st of the federal funds target is thought by many to be accompanied by forward guidance indicating a predisposition to pause afterwards. The announcement at 18:00 GMT will be followed […] More
New Overnight Developments Abroad - Daily Update
Japan Enthrones a New Emperor and Brexit Vote Running Short on Time
October 22, 2019
Japanese markets were closed Tuesday for the enthronement of Naruhito as emperor. British Prime Minister Johnson failed to secure permission Monday for a Brexit vote. In this continuing cliff hanger, he hopes to hold two votes today, one to show sufficient support for the deal he struck with the EU and a second to determine […] More
