Foreign Exchange Insights and Next Week
Next Week’s Menu: December 18 – 24, 2021
December 17, 2021
Central Banks: Monetary policies in the Czech Republic and Thailand will be reviewed. The People’s Bank of China’s monthly setting for 1- and 5-year loan prime rates occurs, and minutes will be published from the last Reserve Bank of Australia Board meeting. Numerous Market Closures Friday for Christmas Eve: Including Germany, France, Italy, Switzerland, Italy, […] More
Central Bank Watch
Russian Central Bank Rate Hike
December 17, 2021
The Central Bank of Russia has raced even harder to overtake inflation, which has climbed to 8.4% from 4.9% at the end of 2020. The latest increase by Russian monetary officials announced today is a full percentage point to 8.5% in size. This was the sixth hike since March, the total of which has equaled […] More
Deeper Analysis
Central Bank Thinking in Addressing the Spike in Inflation
December 17, 2021
The following excerpts from the Bank of Russia governor explaining today’s sharp interest rate hike epitomized the dilemma of many central bankers around the world coming to terms with an inflation spike caused by mostly supply bottlenecks that has lasted longer than anticipated. Our special focus is to ensure that the monetary policy is well-balanced. […] More
New Overnight Developments Abroad - Daily Update
Stock Markets Drop in Wake of Week’s Spotlight on Central Banks and World Inflation
December 17, 2021
Other factors weighing on investor appetite for riskier assets include Omicron, whose true threat to public health and economic growth remains uncertain, and congressional paralysis over President Biden’s Build Back Better Bill. Two more central banks hiked their interest rates. The Bank of Mexico‘s increase late Thursday of 50 basis points to 5.5% reflected a […] More
Central Bank Watch
Bank of Mexico Raises Overnight Interbank Rate by Greater-than-Expected 50 Basis Points
December 16, 2021
The four previous rate hikes in June, August, September and November had been all 25-basis point changes, and analysts had assumed a similar increment. The rate was cut by three percentage points in 2020 and topped off by a 25-basis point reduction to 4.0% in February of 2021. The vote was not unanimous, as one […] More
Central Bank Watch
Lessening Quantitative Monetary Support by the European Central Bank
December 16, 2021
The European Central Bank Governing Council left its three main interest rates (a zero percent refinancing rate flanked by a deposit rate of -o.50% and an MLR facility rate of 0.25% unchanged but authorized changes in its quantitative stimulus with the net effect of lessening the degree of accommodation. Projected GDP growth was revised upward, […] More
Central Bank Watch
A Turkish Central Bank Rate Cut and a Norwegian Rate Increase on the Same Day
December 16, 2021
Thursday’s central bank action illustrated the broadening diversity of monetary policies around the world amid rising inflation but also persistent uncertainty related to the coronavirus pandemic. The Turkish lira got clobbered, slumping more than 5.0% further after the Central Bank of the Republic of Turkey reduced the one-week repo rate by another 100 basis point […] More
Central Bank Watch
Bank of England Raises Bank Rate by 15 bps to 0.25%
December 16, 2021
The Bank of England’s nine-person Monetary Policy Committee lifted the bank rate by 15 basis points to 0.25% in an 8-1 decision and indicated that modest further increases will probably be needed in 2022. Today’s move was somewhat controversial insofar as Britain is being hammered by the rapidly spreading Omicron Variant and now undergoing renewed […] More
New Overnight Developments Abroad - Daily Update
A Parade of Central Bank Announcements and PMI Releases, Plus Another Strong U.S. Labor Market Indicator
December 16, 2021
The rally late yesterday in U.S. equities carried over into Thursday trading. Share prices rose 2.1% in Japan, 0.8% in China, 0.7% in Taiwan and 0.6% in South Korea. The British, German and French stock markets show gains so far of more than 1.0% today, and the DJIA has gone up by a further 0.6%. […] More
Central Bank Watch
FOMC Statement, Projections, and Press Conference
December 15, 2021
In several respects as implied in today’s statement, Fed officials are more comfortable now than in early November with removing accommodation. The tapering of monthly bond purchases was increased significantly and on a pace to end after mid-March rather than at mid-2022. The projected likely fed funds rate level a year from now is 0.6 […] More
