New Overnight Developments Abroad - Daily Update
Central Bank Decisions and Price Data
June 13, 2024
The FOMC‘s June interest rate decision, updated forecasts, and press conference yesterday left an impression that was not quite as hawkish as feared. The likelihood of three rate cuts that had been signaled as recently as March is now remote, but the possibility of one cut before yearend is still clearly in play, and even […] More
Central Bank Watch
Greater-Than-Forecast Pakistani Interest Rate Cut
June 10, 2024
The first interest rate cut at the State Bank of Pakistan since June 2020 has been announced, and the 150-basis point size of the reduction to 20.5% exceeded analyst expectations. Pakistani CPI inflation slowed from 38.0% in May 2023 to 11.8% one year later. In cutting their interest rate, officials noted a ” continued moderation […] More
New Overnight Developments Abroad - Daily Update
Political Strains and Assorted Economic Data Releases
June 10, 2024
Monday finds politics in the forefront: A key centrist in the Israeli ruling cabinet resigned, making Prime Minister Netanyahu even more dependent on the extreme right-wing element of his his government. In the continuing absence of a peace-for-hostages settlement, Israel’s rescue of a few hostages at the expense of hundreds more lives has dealt a […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: June 8-14, 2024
June 7, 2024
Central Banks: An FOMC meeting with updated U.S. macroeconomic forecasts and followed by Chairman Powell’s press conference heads up a menu of scheduled monetary policy reviews that also includes central banks in Japan, Taiwan, Thailand, Armenia, Pakistan, Serbia and Peru. Williams and Goolsbee of the Federal Reserve, as well as former Chairperson and current U.S. […] More
Deeper Analysis
Tight Labor Market Likely to Delay Fed Rate Cut Further
June 7, 2024
The 272 thousand increase last month in U.S. non-farm payroll employment exceeded market expectations by nearly 50% and comes on top of 238k per month job growth in the prior two months. Job growth per se needed delay a rate cut, but today’s report also included a 0.2 percentage point decline in labor market participation […] More
Central Bank Watch
Bank of Russia Gearing Up for Possible Further Rate Hike
June 7, 2024
The Bank of Russia, where officials left the interest rate benchmark today unchanged at 16.0% and delivered the following warning after today’s policy review: Growth in domestic demand is still outstripping the capabilities to expand the supply of goods and services. The Bank of Russia holds open the prospect of increasing the key rate at its upcoming meeting. Furthermore, returning inflation to the target will require a significantly longer period of maintaining tight monetary […] More
New Overnight Developments Abroad - Daily Update
Monetary Policy Announcements from India and Russia and Awaiting U.S. Jobs Report
June 7, 2024
The dollar marked time overnight and is currently unchanged against the euro and Swissy, down 0.1% relative to sterling and the yen but up 0.1% vis-a-vis the Canadian and Australian dollars. The Mexican peso extended yesterday’s rebound. U.S. stock futures are steady. Overseas, share prices closed down 1.0% in New Zealand, 1.1% in Indonesia, 0.6% […] More
Central Bank Watch
ECB Rate Cut Aligned With Market Expectations and Balanced by Explicit Non-Commitment to Any Particular Future Path In Rates
June 6, 2024
The ECB’s first interest rate cut since 2016 was by just 25 basis points and clearly telegraphed to market participants in advance. The refinancing rate had been lifted from zero percent sustained for over six years through July 2022 to 2.50% by end-2022 and 4.50% by September 2023. Such now becomes 4.25% and will be […] More
New Overnight Developments Abroad - Daily Update
Europe Commanding the Spotlight
June 6, 2024
Today’s 80th anniversary of the D-Day assault on Normandy Beaches finds Continental Europe at another crossroads. Allied defenders of democracy have struggled to maintain a cohesive response to the challenges posed by the axis of Russia, China and Iran as well as the troubling war between Israel and Hamas. European Union parliamentary elections begin today […] More
Central Bank Watch
Bank of Canada Rate Cut
June 5, 2024
The Bank of Canada’s policy interest rate of 5.0% since July 2023 has been cut to 4.75% in a move to lessen the degree of policy restraint. However, balance sheet normalization is to continue, and the released statement notably does not commit to any particular timetable of ensuing changes. Recent data has increased our confidence […] More
