RBA on hold but maintains easing bias • The RBA remained on hold as expected, but reiterated further easing may be needed. • Continued low inflation would provide scope for easier policy. • We stay focused on the incoming data that will determine AUD direction (GDP Wed.). Saudi pledges to limit oil volatility • Saudi […]
G20 meeting: More concerns but no action • The G20 meeting ended with no new coordinated action to spur global growth. • The members simply reiterated past policy commitments and showed little urge to take new bold measures. • On FX rates, they agreed to consult closely the markets and refrain from competitive devaluation. • […]
G20 meet as global outlook darkens • G20 central bank governors and finance ministers will discuss global growth risks. • May highlight the need for CBs to avoid competitive currency devaluation. • The market is eager to see actions that may boost spending and support growth. • A positive tone is needed to support pro-risk […]
Fed officials hesitant about further rate hikes • Fed official Bullard said it’s unwise to continue normalization when inflation expectations are declining. • Fed’s Kaplan said he would revise down his expected rate path at the March meeting. • The recent financial stress seems to have shifted Fed’s medium-term rate projections. • March meeting is […]
Iran is out; oil prices plunge • Iran’s oil minister called the Saudi-Russian oil freeze proposal “ridiculous”. • Oil prices declined after Saudi’s oil minister said that production cuts won’t happen. • We need to see production cuts before oil finds bottom. BoE Carney: referendum premium in GBP • BoE Governor stated that the weakening […]
BoE Carney may be questioned on Brexit risks • BoE Governor will testify to parliament on monetary policy and the outlook of the UK economy. • Lawmakers are likely to question him about the risks of the EU referendum. • GBP’s reaction will be highly depended on the tone of the comments. Today: • Germany: […]
Cameron secures EU deal; referendum set for June • UK PM Cameron secured a deal with the EU on Friday. GBP/USD jumped almost 150 pips. • But gave back all the gains at the open Monday after London’s Mayor said he will vote to Leave. • With the referendum set for June, GBP direction may […]
EU-UK talks: Will there be a deal? • EU summit ends today. The decision may determine UK’s future in the EU. • Deal: GBP may strengthen and referendum is set for as early as June. • No Deal: GBP could weaken as this may imply the UK gets less favorable terms in a future deal. […]
Fed minutes: FOMC discusses a change in rate path • Officials saw increased risks to the downside amid market turbulence. • They appeared reluctant to raise rates as the impact of the global turmoil was still unclear. • In March, they may indicate fewer rate hikes in 2016 as the uncertainty has increased. Iran says […]
Oil deal depends on Iran’s cooperation • Oil ministers of Iraq, Iran and Venezuela meet today following the Saudi-Russian agreement to freeze output yesterday. • Iraq appears willing to join in. Iran does not, but may be offered special terms. • An agreement is needed to stabilize oil prices. Fed’s Rosengren reaffirms a slower rate […]
Oil prices jump on surprise Saudi-Russian meeting • Saudi Arabian and Russian energy ministers will meet to discuss oil production. • Saudi has said before it will consider output cuts only if joined by major non-OPEC producers as well. • A potential agreement to cut or freeze production could stabilize a bit the prices. RBNZ […]
Asian equity markets mostly in the green • Asian equity markets (ex-China) rally curbing demand for safe-haven assets. • This positive sentiment could roll into the EU markets, which may recover some of their recent losses China’s exports and imports continue to fall • China’s exports and imports both fell much more than expected in […]
RBA Governor plays down financial market turmoil • RBA Gov. Stevens said that financial markets have now chosen to focus on issues that have been there all along. • The RBA is unlikely to raise rates soon. But it may cut some more. Global stocks continue to slide • European, US and Japanese stock markets […]
Markets await for Yellen’s testimony • Fed Chair Yellen will testify to Congress on monetary policy. • She may keep a balanced stance by acknowledging increased global risks but stress the strength of the US job market. • Any comments in the speech or Q&A session that wipe out surviving hopes for a March hike, […]
Yen skyrockets as Nikkei tumbles • Japanese stock markets plunged overnight, with Nikkei 225 down 5%. • Bank shares are leading the sell-off, as investors concerns about the global slowdown continue to increase. • USD/JPY fell below the psychological 115.00. The risk-off environment could push the rate lower. Today: • Germany: IP and trade balance, […]
BoE unanimously on hold • Policy unchanged, votes shift to 9-0. Inflation Report: Downward revisions in GDP and inflation. • On the positive side, they reiterated that the next move in rates will be a hike. Overnight: RBA upbeat despite global risks • RBA quarterly updated forecasts: GDP growth unchanged, while inflation is exp. a […]
Bank of England: First Super Thursday of the year • BoE simultaneously releases its meeting decision, meeting minutes, the votes and the quarterly Inflation Report. • With no change in policy expected, focus will be on the Inflation Report and the minutes of the meeting. We expect near-term GDP growth and inflation forecasts to be […]
RBNZ signals it won’t focus on low headline inflation • RBNZ Gov. Wheeler dampened expectations for further rate cuts, as it would be inappropriate for the Bank to cut rates to offset low oil prices. • But if concerns around the global economy deepen, they may need to ease further. • On top of that, […]
RBA on hold, but leaves door open • The RBA remained on hold overnight, but signalled there is scope for further easing if needed. • The statement flagged concerns from global risks, but did not revise down the Bank’s forecasts. Fed’s Fischer: Difficult to judge impact of recent turmoil on US economy • Fed’s Vice-Chair […]
China’s manufacturing continues to shrink • The official and the final Caixin manufacturing PMIs for Jan. showed that the manufacturing sector continues to contract. • Even though Caixin PMI stayed below 50, it increased a bit, which caused AUD and NZD to strengthen somewhat. • These soft data increase the probabilities for further easing by […]
Fed on hold, ‘monitoring’ global economy • The Fed remained on hold yesterday, while officials noted they are “closely monitoring” global developments. • The FOMC hint of concerns lowered a bit the likelihood for a March rate hike. USD weakened on the news. RBNZ also holds its fire but signals further easing • The Reserve […]
Fed rate meeting: What to watch • After raising interest rates for the first time in almost a decade in December, the Fed is expected to remain on hold today. • With no press conference and no new projections, all the action will come from the statement accompanying the decision. • The dollar’s reaction will […]
ECB Draghi: ‘Meeting our objective is about credibility’ • ECB President Draghi vowed not to lower the ECB’s inflation target yesterday, stating that: “Meeting our objective is about credibility. If a central bank sets an objective, it can’t just move the goalposts when it misses it“. • ECB’s President defended the Bank’s current stimulus package […]
Oil prices edge higher partly due to US blizzard • Oil prices and Asian stock markets began the week on a stronger note, extending gains from Friday, after a blizzard paralyzed much of the US east coast during the weekend. • The rise in oil prices came as a result of investors speculating a rise […]
Main points for Today ECB meeting preview: Are the latest measures “adequate”? • At their December meeting, the Governing Council cut the deposit facility rate further into the negative territory and extended the QE program for at least another 6 months. • With the latest stimulus package just above a month old, we don’t expect […]
Oil plummets below $28 • US crude oil fell to its lowest level since September 2003, on concerns over a global supply flood. • The International Energy Agency (IEA) said the global oil supply was set to last and that oil markets could “drown in oversupply”. • On top of that, the recent end of […]
China’s GDP growth slowest in 25 years • Chinese data showed that GDP growth slowed to +6.9% yoy in 2015, from +7.3% yoy the previous year. The annual rate was the weakest in a quarter of a century, indicating slowing economic momentum for the world’s second biggest economy. • On top of that, retail sales, […]
Oil extends declines on Iran sanctions fallout • The UN nuclear agency declared on Saturday that Iran had fulfilled the conditions of its nuclear agreement. As such, Western sanctions on the country’s oil exports have now officially been lifted. • Iran holds approximately 10% of confirmed global oil reserves. The deputy oil minister stated on […]
Main points for Today BoJ’s Kuroda: Inflation will steadily head towards the target • BoJ Governor Kuroda reiterated that the country’s underlying price trend is steadily improving towards the Bank’s target and blamed once again the fall in oil prices for the low level of inflation. • What’s more, he said that there is no […]
Main points for Today Equity market carnage continues • The start of the earnings season in the stock markets has done nothing yet to reverse the overall risk-off environment. • Having already a rough start for the year, with China at the forefront of developments, US stock markets continue to decline with no clear signs […]
