Central Bank Watch
Turkish Central Bank Rate Cut
November 18, 2021
Turkish monetary policy has become very politicized this year, conforming to the wishes of President Erdogan’s view that inflation conforms positively, not inversely, to changes in the central bank interest rates. Erdogan has secured his desired downtrend in Turkey’s one-week repo rate by replacing policymakers at the Central Bank of Turkey who disagreed with him. […] More
Central Bank Watch
South African Interest Rate Hike
November 18, 2021
The South Africa Reserve Bank’s repo rate was increased by 25 basis points to 3.75% from a record low of 3.5% in place since April 2020. The approved decision passed by a narrow 3-2 vote by members of the Monetary Policy Committee. Analysts had been anticipating an initial rate hike this month. CPI inflation has […] More
New Overnight Developments Abroad - Daily Update
A Diversity of Central Bank Rate Decisions… Dollar and Equities Mixed
November 18, 2021
Central bank officials today cut Turkey’s one-week repo rate by 100 basis points, left record-low policy interest rates unchanged in the Philippines and Indonesia, and are widely expected to announce an interest rate hike in South Africa. This year’s unexpectedly sharp acceleration of inflation to multi-year and multi-decade highs around the world has overshadowed Covid […] More
Central Bank Watch
Icelandic Central Bank Rate Hike
November 17, 2021
The Central Bank of Iceland‘s policy interest rate has also been raised multiple times in response to the recent acceleration of inflation. Today’s hike to 2.0% from 1.5% increased the ante following 25-basis point advances in May, August, and October. “The inflation outlook has deteriorated somewhat since August, owing in part to more persistent global […] More
New Overnight Developments Abroad - Daily Update
Persistent Global Pressure on Prices, Some More Central Bank Hikes, and the Dollar Touches Its Firmest Level Since July 2020
November 17, 2021
The weighted DXY dollar index touched 96.24 overnight, its strongest level since the first week of July 2020, but has settled back to show no net changed. Relative to Tuesday closing levels, the dollar is down 0.3% relative to the kiwi, yuan, peso, and sterling and by 0.1% vis-a-vis the euro, yen and loonie. The […] More
Central Bank Watch
A Sixth Hungarian Central Bank Rate Hike
November 16, 2021
Magyar Nemzeti Bank’s base rate was raised 30 basis points today to 2.1%. The increase and its size matched expectations. This cycle of gradual increases began in June, hasn’t missed a month, and thus far totals 150 basis points. More tightening is to be expected, as officials served notice that projected inflation in 2022 will […] More
New Overnight Developments Abroad - Daily Update
Xi/Biden, Central Banking Signals, and a Big Line-Up of U.S. Data Releases Today
November 16, 2021
The virtual summit between the Presidents of China and the United States exceeded three hours. The talks were reportedly civil but didn’t yield newsworthy compromises on the key contentious issues. The Fed and Bank of England seem closer to an interest rate lift-off than the European Central Bank or Bank of Japan. Minutes published from […] More
Deeper Analysis
Two Characteristics of U.S. Inflation Spikes When Caused by Supply Bottlenecks
November 15, 2021
The former economics Nobel prize-winner and current New York Times OP-Ed columnist Paul Krugman wrote a piece last week asserting that elevated inflation this year more closely resembles patterns in 1947 than in 1979. It’s an interesting take, original at first glance yet obvious when one reflects on the the root cause of what’s driving […] More
New Overnight Developments Abroad - Daily Update
A Time for Waiting
November 15, 2021
Meaningful data were reported Monday in Japan and China, but investors chose to maintain an advent posture pending other pieces of information that could emerge in the next 24-hour period. These include a virtual summit between Presidents Joe Biden of the U.S. and Xi Jinping of China that is intended to quell mounting tension between […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: November 13 – 19, 2021
November 12, 2021
Central Banks: Monetary policy meetings are scheduled in Turkey, South Africa, Iceland, Indonesia, Hungary and the Philippines. Minutes from the Reserve Bank of Australia’s last policy meeting will be published, and RBA Governor Lowe will be speaking. Scheduled U.S. Economic Data Releases: Retail sales, industrial production, housing starts, building permits, import prices, the NAHB housing […] More
