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
