Archive for October 2022

New Overnight Developments Abroad - Daily Update

Breeze of Risk Aversion Returns

October 31, 2022

U.S. stock futures are about 0.5% lower. With the FOMC meeting this week, investors are having second thoughts that it will be signalling a pause in monetary tightening to assess the impact of the restraint that’s now in the pipeline. Five-month lows reported in the government-compiled Chinese composite and service sector purchasing manager indices to […] More

Larry's Blog

Phillies Draw First Blood in World Series in Game with Ties to Don Larson’s Perfect Game

October 29, 2022

In winning game one of the 2022 World Series, the Philadelphia Phillies overcame a five-run deficit early¬† in the game. This tied a 5-run come-from-behind world series victory two decades earlier in game six of the 2002 World Series won by the Anaheim Angels. The only World Series game in which a winner overcame a […] More

Foreign Exchange Insights and Next Week

Next Week’s Menu: October 30 – November 4, 2022

October 28, 2022

Central Banks: The Federal Reserve, Bank of England, and central banks in Australia, Norway, Malaysia, Kyrgyzstan, and Czech Republics will be reviewing monetary stances next week. Fed Chairman Powell, BOE Governor Bailey, and Reserve Bank of Australia Governor Lowe will hold press conferences. The RBA quarterly Monetary Policy Statement and Bank of Japan Minutes will […] More

New Overnight Developments Abroad - Daily Update

Growth Slowing But Inflation and Costs Staying Rigid

October 28, 2022

There’s been a lot of bad economic news in today’s typical end-of-month data deluge. Another theme to watch is a concurrent big hit to the reputation of famous political and business world figures. Xi‘s dictatorial Communist Party Congress has received two-thumbs down in financial markets, where the Shanghai Composite index lost another 2.3% this Friday, […] More

Deeper Analysis

Thursday’s U.S. Data Release Highlights

October 27, 2022

The composition of U.S. real GDP growth last quarter reveals a weaker economy than the quarter-on-quarter annualized growth rate of 2.6% or the unchanged 1.8% year-on-year GDP increase. Personal consumption, which accounts by far for the largest share (70.7%) of GDP, rose only 1.4%, or a bit less than half as fast as GDP, and […] More

Central Bank Watch

ECB Raises Interest Rate and Changes Terms of Pandemic Relief to Banks

October 27, 2022

The European Central Bank engineered its third interest rate hike since midyear, a hike of 75 basis points that matches its previous action. The first hike in July amounted to 50 basis points. The new rate structure is a 2.0% refinancing rate flanked by a 1.50% deposit rate and a 2.25% on the marginal lending […] More

New Overnight Developments Abroad - Daily Update

Egyptian Pound Floated; Investors Await ECB Announcement

October 27, 2022

The weighted dollar index recovered 0.9% from its overnight low but remains 4.1% below its recent 52-week peek. Overnight net advances in the U.S. dollar range from 0.2% against the Japanese yen to 0.8% versus the Australian dollar and Chinese yuan, with gains of 0.5% relative to the Canadian dollar, kiwi, and Swiss franc, 0.4% […] More

Central Bank Watch

50-Basis Point Central Bank Rate Hike in Canada and More Tightening to Come

October 26, 2022

Today’s 50-basis point increase of the Bank of Canada‘s overnight rate target to 3.75% follows five consecutive hikes since March totaling three percentage points. More rate hikes will follow, and quantitative tightening to reverse some of the balance sheet growth during the pandemic will also continue. Although indicators of long-term expected inflation remain fairly well-anchored, […] More

Central Bank Watch

Kazakhstan, Tajikistan, and Namibia Central Bank Rate Changes

October 26, 2022

Officials at the National Bank of Kazakhstan raised their policy interest rate by 150 basis points to 16.0%, which is more than a 7-year high and which follows seven increases between July 2021 and July 2022 totaling 550 basis points. CPI inflation in Kazakhstan accelerated to a 75-month high of 17.7% in September from 16.1% […] More

New Overnight Developments Abroad - Daily Update

Convergence of Fed-ECB Interest Rate Biases Sends Dollar Lower

October 26, 2022

The dollar has prospered throughout 2022 largely because the Federal Reserve had been seen as more aggressive in raising interest rates than the European Central Bank and other central banks. Today’s main market theme is that perhaps the monetary policy gap will not be as wide as thought previously. The ECB Governing Council will likely […] More

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