New Overnight Developments Abroad - Daily Update
Contrasting Concerns Among Central Bankers and Financial Market Investors
January 19, 2023
As often is the case, the World Economic Forum in Davos has thrust central bank policies into the spotlight. The primary concern of monetary policymakers remains inflation. Federal Reserve District Presidents Mester of Cleveland and Bullard of St. Louis endorsed a need to crank the federal funds rate target above 5.0%. European Central Bank President […] More
Central Bank Watch
Bank of Japan Stays the Course
January 18, 2023
Investors had assumed that last month’s doubling of the daily cap on the 10-year Japanese government bond yield to 0.50% was not, as then claimed, a mere technical tweak of the policy of yield curve control meant to enhance market functionality but rather an initial start to exiting the policy altogether. This month’s BOJ policy […] More
New Overnight Developments Abroad - Daily Update
In December The Bank of Japan Surprised Markets with a Policy Tweak; Failure to Tweak Further This Month Also Caught Investors by Surprise
January 18, 2023
Investors had assumed that last month’s doubling of the daily cap on the 10-year Japanese government bond yield to 0.50% was not, as then claimed, a mere technical tweak of the policy of yield curve control meant to enhance market functionality but rather an initial start to exiting the policy altogether. This month’s BOJ policy […] More
New Overnight Developments Abroad - Daily Update
Chinese Data Greeted With Muted Market Reaction
January 17, 2023
A large menu of Chinese data releases proved not as weak as expected, but can the figures claimed by Beijing officials be believed as accurate? The muted reaction of investors suggests not. Chinese real GDP stagnated last quarter. Analysts were looking for a quarterly contraction of about 1% and consequently weren’t expecting year-on-year growth of […] More
New Overnight Developments Abroad - Daily Update
Spotlight on China and Japan
January 16, 2023
Without U.S. market leadership today due to America’s Martin Luther King’s Birthday holiday, this should be a pretty uneventful start to the third week of January. The two major themes are continuing anticipation of a demand boost from China’s abandonment of zero tolerance for Covid and elevated speculation that the Bank of Japan Board will […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: January 14 – 20, 2023
January 13, 2023
Central Banks: Monetary policy stances will be reviewed in Malaysia, Japan, Norway, China Turkey and Indonesia. The European Central Bank publishes minutes of its last meeting, while the latest Federal Reserve Beige Book of regional economic conditions arrives, too. The Bank of Japan’s Board meeting coincides with updated forecasts that will be embedded in the […] More
Central Bank Watch
Peru and South Korea
January 13, 2023
The Central Reserve Bank of Peru‘s policy interest rate has been increased by 25 basis pints to 7.75%. That matches the incremental rise of the previous four tightenings, which were preceded by a dozen straight hikes of 50 bps and an initial 25-bp increase in August 2021. At 7.75%, the new rate level still 70 […] More
New Overnight Developments Abroad - Daily Update
Less Confidence About Where Inflation May Be Headed
January 13, 2023
Financial market participants are grasping for every straw about inflation the way they once did regarding news about the Covid-19 pandemic. Because there is so much uncertainty regarding each, wide daily and intra-day swings have become common, as each incremental piece of news tips sentiment. In the short first two weeks of 2022, one story […] More
Central Bank Watch
National Bank of Serbia Interest Rate Hike Today
January 12, 2023
The National Bank of Serbia‘s policy interest rate went up by a further 25 basis points to 5.25%. This was the tenth straight increase since a 50-basis point hike from 1.0% to 1.50% done in April 2022, yet the new rate level is only about a third as much as Serbia’s record 15.1% rate of […] More
New Overnight Developments Abroad - Daily Update
Expectations of Further Disinflation Depress the Dollar to 7-Month Weighted Low
January 12, 2023
The dollar plunged 1.4% overnight against the Japanese yen and edged another 0.1% lower relative to the loonie and euro. The weighted DXY dollar index is hovering near its lowest levels since early June and around 10% below last year’s subsequent high. U.S. December CPI inflation figures, due in around 20 minutes, are widely projected […] More
