Central Bank Watch
Swedish Riksbank Ends Negative Policy Rate Stance
December 19, 2019
The Executive Board of the Swedish Riksbank raised the repo rate to zero percent from -0.25%. Sweden’s central bank had been the first to experiment with a negative policy interest rate. Last January, such had been raised 25 basis points to -0.25%. A released statement from policymakers said policy remains expansionary. The repo rate is […] More
New Overnight Developments Abroad - Daily Update
Thursday Rundown of Overnight News, Data Reports, and Central Bank Decisions
December 19, 2019
President Trump has been impeached by a House of Representatives partisan vote of 229-197. He will get a trial in the senate. Market movements today are mostly unremarkable. Sovereign debt yields are up. Equities are down a bit in Europe but started on an up note in the United States. New Zealand’s stock market rallied […] More
New Overnight Developments Abroad - Daily Update
Sliding Into Yearend Mode
December 18, 2019
With the yearend holidays fast approaching, it’s hard to identify overriding themes in financial markets. The dollar is mixed, with rises overnight of 0.4% against sterling, 0.2% relative to the euro and 0.1% against the yuan, no net changes versus the Swiss franc and yen, and dips of 0.3% vis-a-vis the kiwi, 0.2% against the […] More
New Overnight Developments Abroad - Daily Update
BoJo Shocker, Dovish RBA Minutes, and Some Robust U.S. Data
December 17, 2019
The pound hit an air pocket overnight, dropping 1.3% against the dollar after Prime Minister Johnson rejected the option of further extensions to Brexit talks. The lack of any deal is back in play. As things stand, Britain is to leave the EU at end-January and any transition period into full Brexit ends before 2021. […] More
Foreign Exchange Insights and Next Week
Updating a Note Posted in December 2015 on Yearend Seasonality of the Dollar
December 16, 2019
In the early years after the United States adopted flexible dollar exchange rates in March 1973, the U.S. currency an astonishingly consistent pattern of depreciation against the mark during the second half of each December, dropping in thirteen out of fourteen years in one stretch. Like the euro now, the mark was then Europe’s predominant […] More
New Overnight Developments Abroad - Daily Update
Late 2019 Equity Rally Extended
December 16, 2019
Last week’s apparent Phase I trade agreement between the United States and China continued to fuel a rally in global stocks this Monday. Share prices are up 2.6% in the U.K., 1.4% in France, and 1.0% in Germany, and markets close up 1.6% in Australia and 0.6% in China. The Hong Kong and Japan markets […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: December 14-20
December 14, 2019
Central Banks: Monetary policy reviews in Japan, Sweden, Norway, Mexico, Indonesia, Hungary, the Czech Republic, Thailand, and Great Britain. Minutes from the last Reserve Bank of Australia meeting get published. Brainard, Evans, Williams, Rosengren and Kaplan of the Fed speak publicly, and so will Bank of Japan Governor Kuroda. Holiday: South Africans observe the Day […] More
Central Bank Watch
Bank of Russia Eases Again
December 13, 2019
The Central Bank of the Russian Federation reduced its key interest rate by a further 25 basis points to 6.25%, bringing the accrued decline since July to 150 basis points. Moreover, a released statement provides forward guidance that officials during the first half of 2020 will ease further if conditions continue to warrant such. Inflation […] More
New Overnight Developments Abroad - Daily Update
British Election Lifts Sterling… U.S.-Sino Phase I Progress Boosts Stocks
December 13, 2019
Boris Johnson’s Conservative Party won 365 parliamentary seats, clearing the majority threshold by 39 seats. The Conservatives won 43.6% of the votes to Labour’s 32.2% share. Sterling in response catapulted to an 18-month high of $1.3515 but has settled back to a still impressive 1.3% net overnight advance against the dollar. The greenback also touched […] More
Central Bank Watch
European Central Bank Maintains Ultra Easy Stance
December 12, 2019
The European Central Bank retained its interest rates of zero percent on the repo, a -0.5% overnight deposit rate and a 0.25% marginal lending rate. This was the first scheduled policy review chaired by Christine Lagarde, and the released statement contained the following compelling forward guidance on interest rates and quantitative stimulus: The Governing Council […] More
