Central Bank Watch
Malaysia’s First Central Bank Rate Hike Since 2018 Surprised Analysts
May 11, 2022
There’s been a 25-basis point increase in Bank Negara Malaysia’s policy interest rate that was not foreseen by analysts. This hike to 2.0% from 1.75% marks the first increase since January 2018. Malaysian CPI inflation in April of 2.2% had been a tad low than forecast and matched the lowest level since August 2021. A […] More
New Overnight Developments Abroad - Daily Update
Investors Believe that Today’s U.S. CPI Report Will Show a Lower Inflation Rate
May 11, 2022
Ahead of April CPI figures due at 12:30 GMT (08:30 EDT), U.S. stock futures are pointing to a rise of 1.0% or more. Analysts are predicting that on-year inflation will be closer to 8.0% than March’s 483-month high of 8.5%. It is an act of faith based in part on base effects as high month-on-month […] More
Central Bank Watch
National Bank of Romania’s Policy Interest Rate Raised 75 Basis Points to 8-Year High of 3.75%
May 10, 2022
While Federal Reserve officials have been talking the talk of an expeditious tightening of monetary policy, many other central banks have been actually walking the walk. The National Bank of Romania is one of these. Today’s announced Romanian interest rate hike was the largest in a string of six increases since October. In all, the […] More
New Overnight Developments Abroad - Daily Update
Market Pounding Lets Up but Respite Unlikely to Endure
May 10, 2022
Following Monday’s serious damage that saw the SPX and Nasdaq close 17% and 28.2% below their cyclical highs, U.S. stock futures show overnight gains of ranging from +0.6% in the DOW and 0.7% in the S&P 500 to 1.1% in the Nasdaq. Pac Rim equities today had mostly followed America’s downward lead from Monday, with […] More
New Overnight Developments Abroad - Daily Update
Equity Sell-Off Intensifies
May 9, 2022
An investor flight to safety gathered further pace amid inflation fears and expectations that central banks will need to speed up their pace of monetary tightening. When the FOMC after its first meeting in 2022 signaled that interest rate increases were coming soon, the thinking was that the central bank would change the rate in […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: May 7 – 13, 2022
May 6, 2022
Central Banks: Monetary policies will be reviewed in Peru, Mexico, Serbia, Georgia and Malaysia. Bank of Japan Board minutes and Bank of Russia Monetary Report will be published. Lots of central bankers are scheduled to speak publicly during the week, including Williams, Kashkari, Waller, Mester, Daly and Bostic of the Federal Reserve; President Lagarde, VP […] More
New Overnight Developments Abroad - Daily Update
Reality Sinking In
May 6, 2022
The Federal Reserve is really in a tough spot, and the bump in optimism when Chairman Powell disclosed there had been no discussion of raising rates by more than 50 basis points proved short-lived. It’s going to be very hard to get inflation back to target without at some point steepening the rise of interest […] More
Deeper Analysis
Comparing the Central Bank Interest Rate Paths of the United States, Brazil, U.K., Iceland,Poland and Czech Republic
May 5, 2022
All six of the central banks in this comparative study had interest rate hikes announced either today or yesterday. In none of the cases was the increase the first one of the current cycles. All these tightening cycles represent responses to accelerating inflation caused in large part by external factors like the pandemic, policy responses […] More
New Overnight Developments Abroad - Daily Update
Following the Fed’s Lead to an Extent
May 5, 2022
Wednesday saw a post-FOMC rally in U.S. equities and commodity prices but a drop in the dollar and 10-year Treasury yield. The 50-basis point interest rate hike and the details regarding Fed balance sheet reduction were aligned with market expectations, but Powell’s press conference was more dovish than expected, especially his quelling of the possibility […] More
Central Bank Watch
FOMC Statement and Press Conference
May 4, 2022
By a vote of 10-0, the Federal Open Market Committee increased the target range for the federal funds rate by the expected 50 basis points to 0.75-1.00%. An acknowledgment of negative GDP growth in 1Q 2022 is counter-balanced by assertions that personal consumption and business investment remain strong, an upgraded characterization of employment growth to […] More
