Tue, Apr 07, 2020 @ 08:11 GMT
RBA minutes for the April meeting came in less upbeat than the March one, underpinning concerns over developments in Australia's labor and housing market. Policymakers concluded by noting that "developments in the labour and housing markets warranted careful monitoring over coming months". Note, however, that the meeting was held ahead of the release of the March employment report which showed that full-time payrolls rose the most in nearly 30 years. Aussie slumped after the minutes to a 3-day low 0.552.
RBA’s minutes for the November meeting sent a more dovish tone than expected. At the Statement of Monetary Policy, the members noted that “the Board was mindful that rates were already very low and that each further cut brings...
FOMC is highly likely to raise its policy rate, by +25 bps, to a range to 0.75-1% in March. With a March rate hike a done-deal, the market focus turns to the future monetary policy stance. We expect two more hikes, one in June and one in September, this year. Given the recent improvements in employment and inflation, the market has begun talking about four rate hikes in 2018. For now, we stick to three, as suggested in December's dot plot. The market is currently pricing in three 25-bps hikes this year and two for 2018. The Fed's updated Summary of Projections (SEP) would be released with fan charts added for the first time.
At the upcoming meeting, ECB members would likely acknowledge stabilization in the region’s economy, while reiterating accommodative monetary policy. The focus of the meeting would be the strategic review, the first assessment of the central bank’s monetary policy in...
The greenback slumped as the FOMC minutes for the November meeting revealed that 'several' members were concerned that weak inflation would be persistent, rather than temporary. They highlighted the worries about a 'a diminished responsiveness of inflation to resource utilization'. Another important message suggested in the minutes is that a December rate hike is almost a done deal with 'many' members judging that it is 'warranted in the near term' if the macroeconomic data remain steady. Such opinion has outweighed the thought of 'a few 'members' that a rate hike should be delayed. We view the USD selloff might have been over-reacted. Note that the (core) PCE, the Fed’s preferred inflation barometer, has improved, while the October CPI, released after the November meeting, also picked up. We believe the majority of the FOMC still retain the view that weak inflation is transitory.
The market remains divided over whether RBNZ would lower the OCR this week. Back in August, the market had fully priced in a rate cut of -25 bps. Yet, the central bank surprised with a -50 bps reduction, sending...
We expect ECB to deliver a easing package at this week’s meeting. Economic developments since the last meeting have remained steady. However, growth is limited and risk is skewed to the downside. The latest economic projections will show downgrades...
Despite the pleasant surprise in the first quarter GDP growth, the Fed would still leave its policy rate unchanged at the upcoming meeting. The Fed funds rate target is expected to stay at 2.25-2.50%. Its forward guidance would stay...
BOC, as widely anticipated, left the policy rate unchanged at 0.5% in December. The central bank maintained a dovish tone as in recent meetings. While acknowledging that global market conditions have 'strengthened', 'undiminished' uncertainty has continued to undermine 'business confidence and dampening investment in Canada's major trading partners'. Of particular note is that BOC explicitly indicated its different from the Fed, attempting to dampen hopes that BOC would follow the Fed in raising interest rates. It also attributed the recent increase in Canadian treasury yields to US factors, instead of domestic fundamentals. We expect BOC to leave the policy rate unchanged, as well as maintaining a dovish tone, throughout 2017.
BOC would leave the policy rate unchanged at 1.75% at this week’s meeting. Since the last meeting, economic data released pointed to slowdown in Canada’s growth momentum. Although Governor Stephen Poloz has recently affirmed at the central bank should...
The aim of the FOMC meeting later this week is to prepare the market for a December rate hike. While the recent stock market crash and slowdown in inflation have trimmed bet for a December rate hike to 77.5%...
As widely anticipated, SNB left the sight deposit rate unchanged at -0.75%. The target range for the three-month Libor stayed at between -1.25% and -0.25%. Reiterating the excessive strength in Swiss franc, the central bank pledged that it would "remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. Policymakers acknowledged ongoing improvements in the global economy but noted that it is "is still subject to considerable risks", among which the key is political uncertainty with "respect to the future course of economic policy in the US, upcoming elections in Europe, and the complex exit negotiations between the UK and the EU".
RBA left the cash rate unchanged at 1.5% for a 25th consecutive month. Similar to previous meetings, policymakers were upbeat over the growth and the employment outlook, while acknowledging soft wage growth and inflation. In short, the central bank...
The BOC left the policy rate unchanged at 1% in December. While acknowledging the strength in the employment situation, it warned of the slack in the labor market. While upgrading GDP growth forecast, it noted that it does not necessarily imply a narrower output gap. While admitting the policy rate would have to increase over time, it reiterated caution over any monetary decision. All in all, the central bank attempted to deliver a neutral to dovish message, so as not to cripple the recovery path – a lesson learnt after two consecutive rate hikes in July and September. Canadian dollar plunged after the announcement, with USDCAD jumping to as high as 1.2777, highest level in three days.
Despite no change in the policy rate and the QE program, the euro gained after the ECB announcement, as President Mario Draghi added some upbeat flavors at the press conference and as the staff upgraded the inflation forecasts. The members continued to see risks to growth skewed to the downside, but agreed that they are "less pronounced" now. While the forward guidance in the statement maintained that "interest rates will stay low, or lower for an extended period of time", the members had discussions of its removal at the meeting. The single currency rose from a 3-day low of 1.0523 to as high as 1.0615 against US dollar. The pair gained +0.34% for the day. Global yields were also driven higher on possibility of a chance in ECB's policy measures. The 10-year German bund yield added +5.6 bps to 0.421% at close, whilst the 10-year US Treasury yield climbed further higher to about 2.6%.
A rate hike of +25 bps at the upcoming FOMC meeting is a done deal as the market has for months priced in over 90% chance of its occurrence. Recent macroeconomic developments indicate such rate hike is totally justified....
ECB left the main refi rate, the marginal lending rate and the deposit rate unchanged at 0.00%, 0.25% and -0.40%, respectively. However, much change was made in the economic assessment and the forward guidance, as a result of “moderation...
At the last BOE meeting headed by Mark Carney, the members voted 7-2 to leave the Bank rate unchanged at 0.75%. The members voted unanimously to maintain the purchase of government bonds at 435B pound and corporate bonds of...
For the first time since November 2016, RBNZ lowered the OCR, by +25 bps, to 1.5% in May. At the monetary policy statement, it indicated that “a lower OCR is necessary to support the outlook for employment and inflation...
Aussie remains under pressure although the RBA minutes contained little surprise. The minutes signaled that policymakers were encouraged by recent economic growth. However, subdued wage growth and elevated household debt have suggested that policymakers would keep the powder dry....
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