Central Bank Watch
Bank of Korea
April 14, 2022
Officials at the Bank of Korea today authorized the fourth 25-basis point hike of South Korea’s repo rate since last August. Analysts were not expecting an increase, and none had been made at the previous meeting in February. The new rate level of 1.5% is it’s highest since August 2019. CPI inflation in South Korea […] More
Central Bank Watch
European Central Bank Not as Hawkish as Feared
April 14, 2022
At this week’s meeting of the European Central Bank Governing Council, policymakers as expected speeded up the planned wind-down of monthly asset purchases, but the overall tone of the decision reads less hawkishly than expected. Planned asset purchases had previously been set at EUR 40 billion per month all this quarter and at EUR 30 […] More
New Overnight Developments Abroad - Daily Update
Amid Rising Inflation, Some Central Banks React and Others Do Not
April 14, 2022
The weighted DXY dollar index slid 0.3% so far today and is 0.9% below its year-to-date high hit in intraday trading yesterday. Losses of 0.2-0.3% today have occurred against the euro, yen, kiwi, loonie and sterling, while marginal upticks have occurred versus the Swiss franc and Australian dollar. Stock markets closed up 1.2% in Japan […] More
Central Bank Watch
Bank of Canada Interest Rate Doubled to 1.0%, More Hikes and Balance Sheet Reduction to Come
April 13, 2022
Today’s 50-basis point rate hike, although widely expected, was an historic move. Such represents the first hike of that much by a Group of Seven central bank and the Bank of Canada’s largest incremental rise since 2000. Officials had only recently ended its pandemic relief program of bond purchases to support liquidity and now has […] More
Central Bank Watch
Fourth New Zealand Central Bank Rate Hike Larger than the Others
April 13, 2022
The Reserve Bank of New Zealand’s Official Cash Rate has been raised twice as much as was expected this month. Today’s increase of 50 basis points followed three 25-basis point moves last October, November and February. CPI inflation in New Zealand increased to 5.9% last quarter, well above target, from 4.2% in 3Q, 3.3% in […] More
New Overnight Developments Abroad - Daily Update
Rising Inflation Lifts Interest Rates, the Dollar and the Price of Gold
April 13, 2022
The hope is that March might see inflation crest, but investors have heard that story before only to be disappointed. Fresh on the heals of yesterday’s U.S. March CPI data (a 483-month high of 8.5% in the total index and a 475-month 6.5% high of core CPI), U.S. producer price data arrive today. The Federal […] More
New Overnight Developments Abroad - Daily Update
Bracing for Escalating Wars in Ukraine and Against Inflation and Covid
April 12, 2022
All signs are pointing to a more focused and indiscriminate Russian assault on Ukraine. A coming tightening of Western economic sanctions drove the price of West Texas Intermediate oil up 4.1% overnight, but what Ukraine desperately needs is greater military support. That may be coming, too. Covid cases are rising again. 49.4 thousand new cases […] More
Central Bank Watch
Gradual Central Bank Interest Rate Incline Begins in Israel
April 11, 2022
Officials at the Bank of Israel raised their interest rate by a quarter percentage point to 0.35%. The rate had been 0.1% since a 15 basis point cut in April 2020 and matching a record low from late 2014 until November 2018. Analysts had expected an increase today but only by enough to reverse the […] More
New Overnight Developments Abroad - Daily Update
Anxious Start to a New Week
April 11, 2022
With central banks scrambling to counter inflation that has climbed far higher than anticipated, predictions are proliferating of a sharp economic slowdown or even a recession in the United States and many other economies. U.S. consumer price inflation is expected to have accelerated a half percentage point or more in March from February’s 7.9%. The […] More
Foreign Exchange Insights and Next Week
Circumstances and Results Surrounding Previous Times When the Fed Raised Interest Rates in Increments Greater than a Quarter Percentage Point
April 10, 2022
The last federal funds rate hike to exceed 25 basis points was an increase in May 2000 that culminated a tightening cycle of 175 basis points over a period of eleven months that began in mid-1999. The cycle commenced with the perception of a heightened inflation risk. CPI inflation at the time was only 2.0%, […] More
