Central Bank Watch
Japan Wields the Intervention Tool but Doubles Down on Continuing Ultra-Loose Domestic Monetary Policy
September 22, 2022
After numerous rhetorical complaints by officials about the weakness of the yen, Japanese officials sold foreign currency directly in the market to support their currency, which yanked the currency from an overnight low of 145.9 per dollar to as high as 140.35. This was only the third intervention episode in the past three decades. The […] More
Central Bank Watch
Rate Hikes Today in Taiwan, Hong Kong, Macau, Vietnam, Indonesia and the Philippines
September 22, 2022
The discount rate at the Central Bank of the Republic of China (Taiwan) has been raised 12.5 basis points to 1.625%. That increase follows two earlier hikes this year totaling 37.5 basis points. Inflation slipped in August to 2.66% but is still above target. Growth remains positive. A bigger full percentage point hike of the […] More
New Overnight Developments Abroad - Daily Update
Thursday Central Bank Derby Results in Japanese Forex Intervention, Many Interest Rate Hikes, and One Bizarre Cut
September 22, 2022
Net overnight movements in the dollar have ranged widely from a 1.8% plunge against the yen to a 1.1% rise versus the Swiss franc. In between, the dollar fell 0.3% versus the euro, Australian dollar, and sterling. After numerous rhetorical complaints by officials about the weakness of the yen, Japanese officials sold foreign currency directly […] More
Deeper Analysis
FOMC Statement, Projections, and Press Conference
September 21, 2022
The FOMC increased the federal funds target by 75 basis points, meeting but not exceeded the majority forecast of investors. The new target is a range of 3.0-3.25%. The statement made just one modification, describing growth in spending and production as modest. In the July 27 statement, such was said to have “softened.” The policy […] More
Central Bank Watch
FOMC Preview
September 21, 2022
In the race of central bankers around the world to get ahead of the inflation-reduction curve, the Federal Reserve had been neither the least aggressive nor most aggressive monetary institution in shifting from a very accommodative stance to one that goes beyond mere neutrality to eventual restraint. Quantitative stimulus has given way to a program […] More
New Overnight Developments Abroad - Daily Update
FOMC Meeting and Putin’s Reservist Mobilization Overhang an Edgy Day
September 21, 2022
The FOMC announcement at 14:00 EDT will be accompanied by updated macroeconomic forecasts and followed by Chairman Powell’s press conference starting at 14:30 (18:30 GMT). Officials are expected to raise the federal funds target by 75 basis points, bringing the increase since June to 225 bps and establishing the highest target level (3.0-3.25%) since a […] More
Central Bank Watch
Swedish Interest Rate Hike Surpasses Expectations
September 20, 2022
Officials at the Swedish Riksbank today exceeded street expectations with a policy interest rate hike of a full percentage point to 1.75%. The Executive Board’s statement indicates more hikes are probable during the coming half year and revising projected inflation sharply higher to calendar year averages of 8.6% in 2022, 8.5% in 2023, and 2.2% […] More
New Overnight Developments Abroad - Daily Update
Large Jump in European Long-Term Interest Rates
September 20, 2022
Today is the Astart of the FOMC’s sixth scheduled policy review in 2022. A third straight 75-basis point hike to a range of 3.0-3.25% is anticipated, with the announcement due Wednesday at 14:00 EDT (18:00 GMT). Meantime, officials at the Swedish Riksbank today exceeded street expectations with a policy interest rate hike of a full […] More
New Overnight Developments Abroad - Daily Update
Risk Aversion Fueled by This Week’s FOMC Meeting and Hawkish Remarks from ECB Officials
September 19, 2022
The rout in equities retains plenty of momentum today even though Japan and Great Britain are respectively closed in observance of Respect for the Aged Day and Queen Elizabeth’s state funeral. Share prices closed down 1.4%, 1.1%, 1.0% and 0.9% in China, South Korea, Hong Kong and Taiwan, and losses have occurred thus far in […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: September 17 – 23, 2022
September 16, 2022
Central Banks: An unusually large number of central bank policy stances are scheduled for review, featuring the Federal Reserve, Bank of Japan, and Bank of England but also including Brazil, South Africa, China, Norway, Sweden, Turkey, Taiwan, Indonesia, the Philippines, the UAE, Saudi Arabia and Switzerland. Minutes from the last Reserve Bank of Australia policy […] More
