Deeper Analysis
September 2021 and Third Quarter in Figures
September 30, 2021
The summer quarter of 2021 was a volatile one, as it became increasingly apparent to central bankers, economists and investors alike that because of relentless and deepening supply bottlenecks inflation was rising faster and likely to remain very elevated for considerably longer than had been assumed in the first half of the year. Meanwhile, uncertainties […] More
Central Bank Watch
Central Banks in Mexico and Colombia Lift Interest Rates by 25 Basis points
September 30, 2021
The Bank of Mexico’s overnight interest rate, which had been cut by 25 basis points in February to culminate a cumulative reduction of 325 basis points over a one-year period, has been subsequently raised by 25 basis points three subsequent times to 4.75% to counter rising inflation and ensure that inflation will settle back to […] More
Central Bank Watch
Big Rate Hike by the Czech National Bank
September 30, 2021
The Czech National Bank two-week repo rate was hiked by 75 basis points to 1.50%. Instead of implementing a third 25-bp increase since June, this surprisingly large tightening reverses all but 50 basis points of last year’s net reduction of the policy interest rate. In early February of 2020, the rate had been raised from […] More
New Overnight Developments Abroad - Daily Update
End of Third Quarter 2021
September 30, 2021
The DXY weighted dollar dipped 0.1% overnight but experienced a quarterly advance of around 2.5%. In the Pacific Rim, share prices on the final trading day of the quarter rose 1.9% in Australia, 1.4% in New Zealand, 2.0% in Indonesia, and 0.9% in China but fell by 0.4% in Hong Kong and 0.3% in Japan. […] More
New Overnight Developments Abroad - Daily Update
Dollar Strengthens on Day after Big Drop in Stocks
September 29, 2021
The DXY weighted dollar index rose 0.2% to an 11-month high overnight. Equities in the Pacific Rim picked up the baton from North America’s losing session the day before, dropping 2.1% in Japan, 1.8% in China, 1.9% in Taiwan, 1.2% in South Korea and 1.1% in Australia. However, European markets have mustered rebounds so far […] More
Foreign Exchange Insights and Next Week
Brief Dollar Outlook Update
September 28, 2021
The eleven-week hiatus since the previous currency market essay in this space partly reflects the summer season, when day-to-day market action tends to be less representative of underlying fundamentals. The length of time without a currency essay also was justified by a secular trend toward lessening dollar volatility, which had been a major theme highlighted […] More
New Overnight Developments Abroad - Daily Update
Rising Energy Prices Lift Long-Term Interest Rates, Which in Turn Depresses Equities but Boost Dollar
September 28, 2021
Ten-year sovereign debt yields jumped overnight by seven basis points in the U.K. and Italy, 5 basis points in Greece, 4 bps in France and Spain, three basis points in the U.S. and Germany and two bps in Japan. Nasdaq and S&P stock futures were down 1.3% and 0.7% with about an hour to go […] More
New Overnight Developments Abroad - Daily Update
Politics in the Forefront
September 27, 2021
As expected, political power will be changing hands in Germany. In yesterday’s national parliamentary election, the Social Democrats (SPD) captured the most seats (206 at last count) in a close and widely fractious vote. The SPD percentage of total votes cast was 25.7%, and the Christian Democrat/Social Democrat central-right group (24.1) share was its smallest […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: September 25 – October 1, 2021
September 24, 2021
Central Banks: Monetary policies will be reviewed Thailand, Mexico, Colombia and the Czech Republic. The Bank of Japan publishes its quarterly Tankan corporate survey and also a summary of the September 20-21 Board meeting and minutes from its penultimate policy meeting. Federal Reserve Bank of NY District President Williams speaks publicly. Event and Holidays: The […] More
New Overnight Developments Abroad - Daily Update
Evergrande Misses Payment and Some Disappointing Data Reported
September 24, 2021
The dollar rose against most currencies overnight, including gains of 0.7% against the Aussie dollar, Mexican peso and Turkish lira, 0.6% relative to the New Zealand dollar, 0.3% vis-a-vis the loonie and sterling and 0.2% against the Japanese yen. But dips of 0.2% versus the euro and 0.1% against the Swissie suppressed net movement in […] More
