ECB
A Focus on Central Banks, Commodities and China
April 21, 2016
The ECB just announced decisions from today’s third Governing Council meeting of the year. No further rate changes were enacted. At the prior meeting on March 10, the refinancing rate was sliced 5 basis points to 0.0%, the deposit rate was moved 10 basis points more deeply into the red to -0.40%, and the marginal […] More
High-Flying Yen
April 7, 2016
The yen climbed to new highs for the move of 108.02 per dollar and 123.12 per euro. The yen overnight gained 1.3% on balance against the U.S. currency despite yesterday’s hint from a Ministry of Finance official that intervention is possible. Today, Prime Minister Abe seemed to undermine that threat, saying that countries should not […] More
Euro Rises on ECB Announcements
March 10, 2016
The ECB Governing Council announced a more aggressive package of stimulants than analysts were expecting. All ECB central bank interest rates including the main refinancing rate were lowered. The size of monthly quantitative asset purchases was increased 33% to EUR 80 billion and will run at least through end-2017. The types of eligible assets in […] More
Central Banks Stand Down
January 21, 2016
In these tumultuous times, it would not be surprising to see monetary policy changes taken to help dissipate the high level of market fear. Instead, The ECB Governing Council retained its interest rate structure, consisting of a 0.05% refinancing rate flanked by a negative 0.30% deposit rate and a +0.25% marginal lending rate. Brazil’s monetary […] More
ECB Delivers Less Support than Expected, Sending Euro Sharply Higher
December 3, 2015
ECB officials, who had strongly hinted that significant additional monetary policy relief is imminent, failed to meet the market’s expectations. Largely in response, the dollar recorded an overnight drop of 2.1% against the euro and 1.7% versus the Swiss franc. Share prices in Europe are down 3.0% in France, 2.8% in Germany, 2.0% in Spain, […] More
Heavy Flow of Information Continues
September 3, 2015
The Bank of Brazil ended a 7-meeting streak of rate tightening, as risks of deepening recession outweigh danger of vicious cycle of currency depreciation and rising inflation. The Selic Rate was left at 14.25%, its level after 325 basis points of tightening between October 2014 and July 2015. The Swedish Riksbank likewise left monetary policy […] More
Many Competing Stories but a Unifying Theme is Better Growth in Europe by a Slower Trend Elsewhere
April 15, 2015
ECB President Draghi is wrapping up his press conference. Policy wasn’t changed further. Focus is currently on full implementation of policy initiatives taken recently. Draghi finds the favorable impact of quantitative easing to be impressive: real interest rates have fallen as expected inflation is rising. An important new sentence in the released statement explains what […] More
Report of Weak German Orders and a Difficult Day for the Kiwi
March 5, 2015
The New Zealand dollar sank 1.0% against the dollar and fell to a one-month low against the Australian dollar on the possibility that the Reserve Bank of New Zealand might resort to property market-specific regulatory changes instead of and delaying a near-term interest rate hike. German industrial orders slumped 3.9% in January, reversing nearly all […] More
Spotlight on Central Banks
January 21, 2015
In response to disinflationary implications of the plunge in oil prices, the Bank of Canada cut its overnight money rate target to 0.75% from 1.0%. Oil price changes also pose downside risks to growth, which is projected to fall to around 1.5% in the first half of this year, and to financial stability. The prior […] More
New Highs for the Dollar
January 5, 2015
Fresh U.S. dollar highs for the move were set overnight of 1.1867 per euro, 1.5178 per pound, 0.8035 per AUD, CHF 1.0295 and C$ 1.1845. The U.S. currency is currently below its overnight peaks but retains gains from Friday’s closing of 0.8% against the euro, 0.7% versus the Swiss franc, 0.6% relative to sterling, 0.4% […] More
