Foreign Exchange Insights and Next Week
Next Week’s Menu: May 27 – June 2, 2023
May 26, 2023
Central Banks: Monetary policies to be reviewed in Thailand and Kyrgyzstan. Federal Reserve Beige Book of regional economic conditions and minutes from last European Central Bank governing council meeting to be published. Bowman and Jefferson from the Fed and ECB President Lagarde speak publicly during the week. Events and Holidays: Turkey’s runoff presidential election happens […] More
New Overnight Developments Abroad - Daily Update
Indications that a Debt Ceiling Deal Will Be Reached in Time
May 26, 2023
While no deal has been attained yet to raise the U.S. debt ceiling, both sides of the discussions are expressing optimism, and investors are anticipating that the U.S. will not default. That’s why equities are higher, but the 10-year U.S. Treasury yield is also up two basis points to an 11-week high after the release […] More
Central Bank Watch
South African Reserve Bank Interest Rate Hike Exceeds Expectations
May 25, 2023
An interest rate increase of 50 basis points to 8.25% decided unanimously today matched the prior hike in March and is the tenth increase since the rate was raised from a pandemic low of 3.50% to 3.75% in November 2021. CPI inflation of 6.8% in April exceeded the 3-6% target range ceiling, and indicators of […] More
New Overnight Developments Abroad - Daily Update
German Recession Confirmed and Interest Rate Decisions in South Korea, Turkey and Indonesia
May 25, 2023
U.S. GDP data will be released shortly. In the meantime, German GDP growth last quarter was revised to -0.3% (not annualized) from zero percent reported originally. That’s the second negative quarter in a row and the third drop in the past four quarter, resulting in a negative year-on-year growth rate of -0.5% as well. The […] More
Central Bank Watch
FOMC Minutes from the May 2-3 Meeting
May 24, 2023
The FOMC minutes, published this afternoon, reveal frustration that inflation continues to recede more slowly, pushes back against any consideration of a rate cut in 2023 or indication that the rate under no circumstances would be raised further in the second half of 2023. The mantra is that policy will be data driven, leaving most […] More
Central Bank Watch
Central Bank Rate Hikes in Iceland and New Zealand
May 24, 2023
Iceland’s 7-day term deposit rate was lifted 125 basis points to 8.75%. Such had been as low as 0.75% prior to May 2021, 2.0% at the beginning of 2022, and 6.0% when 2023 started. With CPI inflation edged up to 9.9% and measures of long-term expected inflation also creeping higher, the statement released in conjunction […] More
New Overnight Developments Abroad - Daily Update
More Pessimism
May 24, 2023
The possibility of a U.S. debt default next month persists. Central Bank interest rates were raised today by 125 basis points in Iceland, 50 bps in Nigeria, and 25 bps in New Zealand. Europe’s largest economy has “suffered a setback” according to the May German business climate index compiled by the IFO Institute. Inflation according […] More
New Overnight Developments Abroad - Daily Update
Some Reasonably Good Data Reports But Debt Ceiling Countdown Rumbling On
May 23, 2023
Preliminary purchasing managers surveys for May reported this Tuesday all exceeded the 50 level that separates activity that is expanding from activity that is contracting. The S&P Global U.S. composite PMI reading rose 1.1 points to a 13-month high of 54.5, but the gulf between services (a 13-month high of 55.1) and manufacturing (a 3-month […] More
New Overnight Developments Abroad - Daily Update
U.S. Debt Ceiling Standoff Into the Eleventh Hour
May 22, 2023
Without a higher debt ceiling, the U.S. federal government will begin to not meet all its spending obligations by the start of June, prompting a default by mid-month, if not somewhat sooner. Biden and McCarthy are to resume talks to avert such a crisis today. Fed Chairman Powell again insinuated that banking system strains could […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: May 20 – 27, 2023
May 19, 2023
Central Banks: Monetary policy reviews are scheduled in Turkey, South Korea, Indonesia, New Zealand, South Africa, Iceland and Hungary. Minutes from the last FOMC meeting will be published. Special Events: U.S. debt ceiling talks, which were unilaterally paused today by the Republican negotiators, will presumably resume at some point in the coming week and draw […] More
