Central Bank Watch
30-Basis Point Hike in Hungary’s Central Bank Base Rate
June 22, 2021
Today’s rate hike at the National Bank of Hungary from 0.60% to 0.90% reverses a pair of 15-basis point reductions in June and July of 2020 and represents the first increase since a 50 basis point move to 7.0% in December 2011. The backdrop to today’s action is inflation (now 5.1%) that is above the […] More
New Overnight Developments Abroad - Daily Update
Somewhat Firmer Dollar and Share Prices Holding onto Monday’s Recovery
June 22, 2021
The dollar firmed overnight by 0.2% against its weighted DXY index, the yen, euro, Swiss franc and loonie. The dollar also advanced 0.3% against the Australian dollar and sterling, 0.4% versus the Mexican peso, and 0.1% vis-a-vis the kiwi and yuan. The dollar fell back 0.9% against the Turkish lira from a record high. Last […] More
New Overnight Developments Abroad - Daily Update
Investors Continuing to React to Fed’s New Tone
June 21, 2021
Markets had expected the FOMC meeting last week to push back against concerns related to this year’s supply delay-driven rise in inflation and were surprised when that opportunity wasn’t fully utilized. The dot-plot diagram of individual member interest rate path preferences shifted the likely timing of the first hike in the federal funds rate from […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: June 19 – 25, 2021
June 18, 2021
Central Banks: Monetary policies will be reviewed in the U.K., Hungary, the Czech Republic, China, Mexico, Thailand and the Philippines. Fed Chairman Powell and Bank of Japan Governor Kuroda will speak publicly. Bank of Japan publishes Board meeting minutes. Special Events: Summer solstice finds the Western United States in the grip of a heat wave […] More
Central Bank Watch
Bank of Japan’s June Policy Decisions
June 18, 2021
The Bank of Japan left its short-term interest rate and 10-year JGB yield targets unchanged at -0.1% and “around zero percent,” respectively. Ceilings on purchases of ETFs, REITs, commercial paper and corporate bonds were not changed. The special pandemic relief lending facility was extended by a half year to the end of March 2022, and […] More
New Overnight Developments Abroad - Daily Update
Dollar and Yen Continue benefiting from Post-FOMC Risk Aversion
June 18, 2021
The dollar edged 0.1% higher overnight against its weighted DXY index to its strongest level since April 12. In bilateral terms, the U.S. currency advanced 0.4% against the Australian dollar, 0.3% versus the New Zealand dollar and sterling, 0.2% relative to the Swiss franc and 0.1% vis-a-vis the loonie, but the dollar dipped 0.1% against […] More
Central Bank Watch
Brazilian Central Bank Rate Hike
June 17, 2021
The Central Bank of Brazil’s Selic interest rate as expected was raised by 75 basis points to 4.25%. That move had been expected and follows similar incremental moves undertaken in March and May. A released statement moreover signals another 75 basis point hike at the committee’s next scheduled review and a likely rate level of […] More
New Overnight Developments Abroad - Daily Update
Parade of Other Central Banks
June 17, 2021
Markets had reacted late Wednesday to the Federal Reserve‘s signal that its initial interest rate hike is likely to occur during 2023, rather than 2024 as implied previously. Several other central banks had scheduled policy reviews whose results were learned subsequently. At the time of the opening of U.S. stock market trading on Thursday, the […] More
Central Bank Watch
Powell’s Press Conference
June 16, 2021
Financial markets exhibited their sharpest movement of the day during the first half of Chairman Powell’s one-hour press conference. Little transpired in that half hour that was particularly illuminating, and so it appears investors were merely responding to the updated forecasts that show the fed funds rate starting to climb out of the cellar in […] More
Central Bank Watch
FOMC Statement and Projections
June 16, 2021
The FOMC statement is almost identical to the previous one in late April, except that it acknowledges vaccination progress reducing the drag of Covid on the economy. However, the thought that some Covid risks continue was not dropped. The most newsworthy part of the updated projections involves end-year forecasts for the appropriate federal funds target. […] More
