RBA Monetary Policy Decision by Glenn Stevens

Posted by Forexsq 112 days ago (http://www.rba.gov.au)
img At its meeting today, the Board decided to leave the cash rate unchanged at 2.25 per cent.

Moderate growth in the global economy is expected in 2015, with the US economy continuing to strengthen, even as China's growth slows a little from last year's outcome.

Commodity prices have declined over the past year, in some cases sharply. The price of oil in particular is much lower than it was a year ago. These trends appear to reflect a combination of lower growth in demand and, more importantly, significant increases in supply. The much lower levels of energy prices will act to strengthen global output and temporarily to lower CPI inflation rates. Prices for key Australian exports have also been falling and therefore Australia's terms of trade are continuing to decline.

Financial conditions are very accommodative globally, with long-term borrowing rates for several major sovereigns at all-time lows. Financing costs for creditworthy borrowers remain remarkably low.

In Australia

Bank of England says UK economy to grow by 2.5% in 2015

Posted by Forexsq 76 days ago (http://www.bbc.co.uk)
img The Bank of England has cut its 2015 growth forecast from 2.9% to 2.5%, and for next year from 2.9% to 2.6%, as governor Mark Carney unveiled his quarterly inflation report.

And it backed expectations interest rates may rise in about a year's time.

Mr Carney also said deflation could emerge during the year, but that inflation was expected to pick up notably towards the end of the year.

Inflation was 0% in March for a second month, well below the Bank's 2% target.

The figure marks the lowest rate of Consumer Prices Index inflation since estimates of the measure began in 1988.

The Bank's base rate has been at a record low of 0.5% for more than six years.
Wage growth

Mr Carney blamed falling inflation on a sharp fall in energy prices, lower food prices and strong sterling. He said these factors explained about three-quarters of the fall in inflation.

However, the Bank's governor said he was relaxed about the low inflation rate and said the factors which had driven i

ECB monetary policy decisions

Posted by Forexsq 11 days ago (http://www.ecb.europa.eu)
img Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by the Commission Vice-President, Mr Dombrovskis.

Based on our regular economic and monetary analyses, and in line with our forward guidance, we decided to keep the key ECB interest rates unchanged.

Regarding non-standard monetary policy measures, the asset purchase programmes continue to proceed smoothly. As explained on previous occasions, our monthly asset purchases of €60 billion are intended to run until the end of September 2016 and, in any case, until we see a sustained adjustment in the path of inflation that is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term. When carrying out its assessment, the Governing Council will follow its monetary policy strategy and concentrate on trends in inflation and the medium-term outlo

BOE to stress test banks for financial crisis

Posted by Forexsq 120 days ago (http://www.topforexbrokers.com)
img Britain's seven biggest lenders will have to show they can cope with a global economic slump triggered by a sharp slowdown in China and a crash in the euro zone in this year's round of stress tests conducted by the Bank of England.

Britain decided to introduce annual stress tests for its banks after the 2007-09 financial crisis which required taxpayers to pump 66 billion pounds into Royal Bank of Scotland and Lloyds Banking Group .

"By assessing the resilience of the UK banking system against a major external shock we will improve further our ability to identify vulnerabilities and we will ensure that banks have plans in place to address a wider range of possible stresses," BoE Governor Mark Carney said on Monday.

The Bank also said the Co-operative Bank, which failed last year's tests and is deep in a restructuring programme, would not be assessed as it is now too small.

That leaves six banks and one mutual lender to face this year's tests -- Barclays , HSBC , Standard Ch

BOJ Keeps Record Stimulus With Inflation Set to Stall

Posted by Forexsq 133 days ago (http://www.bloomberg.com)
img The Bank of Japan kept its record stimulus unchanged, even as it warned that cheaper energy prices will bring inflation to a halt in the world’s third-largest economy.

The BOJ maintained a pledge to expand the monetary base at an annual pace of 80 trillion yen ($660 billion), as forecast by all 34 economists in a Bloomberg News survey. While it said consumer price gains will slow to about zero percent “for the time being,” the central bank stuck to its view that the economy will continue a moderate recovery.

Governor Haruhiko Kuroda is counting on the benefits of lower oil prices to wash through the economy, spurring growth and inflation in the longer term. The immediate focus is on the outcome of wages talks between companies and their unions that will indicate whether businesses are passing along more of their record cash holdings and profits to workers.

“The BOJ is admitting that consumer prices could fall, while indicating that it’s not planning steps to counter that,” sa

Strong pound could stall interest rate rise, says Mark Carney

Posted by Forexsq 138 days ago (http://www.telegraph.co.uk)
img The pound's strength could force the Bank of England to delay increases to interest rates, the central bank's Governor admitted on Thursday.

Mark Carney, Governor of the Bank of England, said that the “protracted effects of sterling’s strength on the prices facing UK consumers” would continue to drive inflation lower.

Inflation is currently well below the Bank’s 2pc target, and this weakness in price growth could affect “the pace and degree” of changes to the central bank’s interest rates, Mr Carney said.

Speaking at the Advanced Manufacturing Research Centre in Sheffield, Mr Carney said that “there is a risk that the combination of persistently low global inflation and the strength of sterling could weigh on prices here for some time”.

Inflation fell to a record low in the year to February, standing at just 0.3pc. The Bank's latest update on the health of the economy stated that it was more likely than not that inflation would fall below zero in the coming months, well b

Draghi Says ECB Action Can and Will Return Inflation to Goal

Posted by Forexsq 139 days ago (http://www.bloomberg.com)
img Mario Draghi said the European Central Bank’s expanded asset purchases will succeed in pushing inflation in the euro area back toward its goal.

“We can deploy and we will deploy monetary policy in a way that can and will stabilize inflation in line with our objective,” the ECB president said at a conference in Frankfurt, three days into his 1.1 trillion-euro ($1.2 trillion) bond-buying program. “Our monetary policy is certainly supporting the recovery.”

In his first public appearance since QE started, Draghi can point to falling yields on government debt and a slide in the euro as signs that the program to buy 60 billion euros a month of sovereign and private-sector debt is making a mark. What he can’t yet show is whether banks and companies will respond by putting the fresh cash to work in the real economy.

The yield on 5-year German bonds was minus 0.12 percent at 9:57 a.m. Frankfurt time and 10-year Spanish debt was at 1.23 percent. The euro was down 0.4 percent at $1.065.

ECB Keeps Interest Rates Unchanged as Investors Await QE Details

Posted by Forexsq 145 days ago (http://www.bloomberg.com)
img The European Central Bank kept interest rates unchanged at record lows as investors wait for President Mario Draghi to reveal more details of his 1.1 trillion-euro ($1.2 trillion) bond-buying plan.

The 25-member Governing Council left the main refinancing rate at 0.05 percent at its meeting on Thursday in Nicosia. The decision was predicted by all 54 economists in a Bloomberg News survey. The deposit rate remained at minus 0.2 percent and the marginal lending rate at 0.3 percent.

Draghi is set to unveil the starting date for government-bond purchases and other elements of quantitative easing at his press conference. He’ll also present the ECB’s new growth and inflation forecasts, which will run through 2017 for the first time and help investors judge how long QE might last.

“We have heard very few details as to the operational modalities of the purchases,” said Anthony O’Brien, a fixed-income strategist at Morgan Stanley in London. “We do expect President Draghi to shed more

Bank of England says fraud office investigating liquidity auctions

Posted by Forexsq 145 days ago (http://uk.reuters.com)
img British fraud investigators are looking into possible fraud related to liquidity auctions held by the Bank of England during the financial crisis in 2007 and 2008.

The BoE, which was rocked by a scandal over the manipulation of foreign exchange markets last year, said it had referred information relating to the auctions to Britain's Serious Fraud Office in November after an inquiry commissioned by the Bank.

"Given the SFO investigation is ongoing, it is not appropriate for the Bank to provide any additional comment on the matter at this time,” the BoE said in a statement.

The Financial Times reported in November that the BoE was investigating whether staff knew or even aided possible manipulation of the auctions it held at the onset of the financial crisis to pump liquidity into the banking system.

The SFO confirmed it was looking into the material provided by the BoE.

Last week, the BoE said it had made a series of changes to how it gathered information from markets an

India central bank cuts rates by 25bps to 7.5%

Posted by Forexsq 146 days ago (http://www.cnbc.com)
img The Reserve Bank of India surprised markets on Wednesday by cutting rates for the second time this year, sending stocks to a record high.

The central bank lowered its benchmark repo rate by 25 basis points to 7.5 percent, it said in a statement, on the back of easing inflation and the government's commitment to fiscal discipline.

The previous cut, which was also unscheduled, took place mid-January when the central bank shaved rates by a quarter point.

The Nifty index soared to a record 9,008 at the open on the news, while the BSE sensex jumped to a two-month high. The Indian rupee also rose against the U.S. dollar, strengthening to 61.65 versus 61.91 before the announcement.

The new normal

"I think to some extent the off-cycle moves are becoming the 'new normal'. It looks like the rate cut is an endorsement of the RBI's belief in the government's 'long haul' budget," Vishnu Varathan, senior economist at Mizuho Bank, told CNBC.

The government on Saturday pledged to be

BOE Chief Dealer Fired After 20 Internal-Policy Violations

Posted by Forexsq 146 days ago (http://www.bloomberg.com)
img The Bank of England’s chief currency dealer was dismissed after at least 20 violations of the institution’s internal policies were unearthed amid a review into whether central bank staff knew about currency rigging.

Martin Mallett was fired in November for breaching BOE policies on confidentiality and information technology, Governor Mark Carney said Tuesday. They were uncovered during an investigation into allegations central bank staff knew currency traders shared private client information with counterparts at other firms to rig key foreign-exchange benchmarks.

“This is an employee who, in other respects, had served the bank well and had served his community well in terms of charity,” Carney told members of the Treasury Committee. “But with a senior officer of the bank, with multiple misjudgments, when you have those facts in front of you, you have to act.”

Carney explained the reasons for Mallett’s dismissal while answering questions about an investigation by lawyer Antho

Ukraine Raises Key Rate to World’s Highest to Stem Currency Rout

Posted by Forexsq 146 days ago (http://www.bloomberg.com)
img Ukraine’s central bank raised its benchmark interest rate to the world’s highest, the fifth emergency move since the beginning of last week to arrest a plunge in the hryvnia as the nation moves closer to obtaining a bailout.

The National Bank of Ukraine raised its refinancing rate to 30 percent from 19.5 percent, effective Wednesday, to “stabilize the situation on the money and lending markets,” Governor Valeriya Gontareva told reporters in Kiev. That’s the highest benchmark among all countries tracked by Bloomberg.

Policy makers are staggering from the turmoil wrecking the economy as the hryvnia, the world’s worst performer in the past year, spurs panic buying among shoppers and destabilizes banks. Before opting to push the key rate to the highest since 2000, the central bank in Kiev used tighter capital controls and a one-day freeze on currency trading to steady the hryvnia.

“The picture is being blurred: every day a different measure is taken,’” Simon Quijano-Evans, head o

China Steps Up Easing With Second Rate Cut in Three Months

Posted by Forexsq 149 days ago (http://www.bloomberg.com)
img China’s central bank cut benchmark interest rates for the second time in three months as disinflation gives room to step up support for the nation’s slowing economy.

The one-year deposit rate will be lowered by 25 basis points to 2.5 percent and the one-year lending rate will also drop by a quarter percentage point to 5.35 percent on March 1, the Beijing-based People’s Bank of China said on its website late Saturday.

The move reflects deepening concern over an economy squeezed by a property slump, tighter controls over local government debt and rising capital outflows. By adding rate cuts to a reduction in the cash banks must set aside as reserves, the PBOC is intensifying its easing measures along with more than a dozen global counterparts this year as plunging commodity prices provide scope to support growth.

“A rate cut was urgently needed,” said Wang Tao, the chief China economist at UBS Group AG in Hong Kong, who predicted one or two more reductions this year. “The debt

Hungary Takes Control of Buda-Cash Brokerage on Alleged Fraud

Posted by Forexsq 152 days ago (http://www.bloomberg.com)
img Hungary’s central bank took control of Buda-Cash Brokerhaz Zrt. on suspicion the broker manipulated accounts for more than a decade, causing about 10 billion forint ($37 million) in losses for clients.

The National Bank of Hungary suspended the broker’s license and appointed a commissioner to control its operations on suspicion that the firm can’t account for as much as 100 billion forint in assets, the regulator said on Tuesday. A spokeswoman for Buda-Cash declined to comment by phone, referring questions to the central bank.

“We don’t have a clear picture yet, only a very strong suspicion,” Laszlo Windisch, the central bank’s vice president, told reporters in Budapest. “The steps are necessary to clarify the situation and avoid further damage.”

Budapest-based Buda-Cash, founded in 1995, served a clientele of more than 15,000 investors and had an about 4 percent market share in spot equities trading last year, according to stock exchange data. The investigation may also have

Treasuries Decline as Yellen Signals Fed to Be Flexible on Rates

Posted by Forexsq 153 days ago (http://www.bloomberg.com)
img Treasuries extended losses as Federal Reserve Chair Janet Yellen signaled that a change in the central bank’s guidance on interest rates won’t lock it into a timetable for tightening.

U.S. government securities are already on course for the biggest monthly loss since 2009, according to Bank of America Merrill Lynch indexes, as rising wages and payrolls fuel speculation the Fed may increase borrowing costs as soon as June.

“She has to emphasize the economy is doing well,” David Keeble, head of fixed-income strategy at Credit Agricole SA in New York, said before Yellen spoke.

The benchmark 10-year yield climbed four basis point to 2.10 percent at 10:03 a.m. New York time, according to Bloomberg Bond Trader data.

Treasuries have lost 2.1 percent in February, the biggest decline since December 2009, according to the BofAML indexes. That marks a reversal from the end of last year, when tumbling oil costs cut demand for riskier investments and dimmed the inflation outlook, sendi
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