Central Bank of Iceland
Strong Yen Sales
October 2, 2024
Japan’s ultra-loose monetary policy when other central banks scrambled to tame a sharp rise inflationary pressure in 2021-3 had encouraged investors to borrow essentially free money offered in Japan and invest in higher yielding assets elsewhere. Those so-called carry trades are now being reversed and consequently driving down the yen, which slumped 0.9% against the […] More
Divergent Central Bank Signals
May 8, 2024
Three European central banks have now cut interest rates this month: the Czech National Bank by 50 basis points last Friday, the National Bank of Moldova by 15 bps yesterday and, most tellingly, the Swedish Riksbank today by 25 basis points to 3.75%. These announcements are a harbinger of coming reductions elsewhere in the region. […] More
A Focus on Central Banks, Particularly the Fed
March 20, 2024
At 14:00 EDT (18:00 GMT), the Federal Open Market Committee will telegraph the decisions from its second scheduled policy meeting of 2024. The federal funds rate target will be left at 5.25-5.50% where such has been since last July. An updated set of forecasts also at 14:00 EDT will provide the first indication of any […] More
A Pause in the Action
February 8, 2024
While equities in China (+1.3%), Japan (+2.1%), France (+0.6% so far), Italy (+0.6%), Spain (+0.5%) and Germany (+0.4%) followed yesterday’s upbeat U.S. example, U.S. futures have paused on technical considerations. China’s gain equated to a loss for Hong Kong today of 1.3% and India of 1.0%. Pakistan’s election today has been marred by outbreaks of […] More
Softer Dollar and Sovereign Debt Prices as Central Banks Not Rushing to Ease but Equities Showing Some Resilience
February 7, 2024
The dollar slid overnight by 0.3% against sterling and 0.2% relative to the euro, Canadian dollar and as measured by the DXY weighted index. A further rise in sovereign debt yields today — 4 basis points in British 10-year gilts, 3 basis points in 10-year U.S. Treasuries, and 2 basis points in German, French, Italian […] More
Ungovernable U.S. Congress Elevates Uncertainty But Dollar Softens Only Modestly
October 4, 2023
In a startling political development, the U.S. House of Representatives has no Speaker, and it could be quite a while before that critical vacancy is filled. Without that critical step, Congress will be rendered impotent. Ordinarily such a crisis might be expected to weigh discernibly on the dollar, but the other force strongly at play […] More
Icelandic Central Bank Rate Hike
August 23, 2023
Policymakers at the Central Bank of Iceland delivered an unexpected 50-basis point additional hike in the 7-day term deposit rate to 9.25%. The cumulative 375 basis points of tightening this year follows a combined 400 bps of increase in 2022 and 125 basis points in 2021. The pandemic low of 0.75% prevailed from November 2020 […] More
Weak Data Depresses Long-Term Interest Rates but Not Equities… Dollar Strengthens
August 23, 2023
Ten-year sovereign debt yields dropped overnight by 10 basis points in the U.K., 7 basis points in Germany and 4 basis points in the U.S.. The British FTSE recovered 0.7%. Continental European equities and U.S. stock futures are barely changed. The dollar climbed above Tuesday closing levels by 0.8% relative to sterling, 0.4% versus the […] More
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 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
