RBA Minutes of Monetary Policy Meeting August 2015

Posted by Forexsq 16 days ago (http://www.rba.gov.au)
img Members noted that economic growth in Australia's major trading partners had remained close to its long-run average, although growth had eased a little in the June quarter. The forecast for growth in 2015 and 2016 had been revised down slightly, but growth was expected to remain around its long-run average. The increase in global industrial production had slowed over the past year or so, particularly in the Asian region, and this had contributed to lower commodity prices. Members noted that, as a result, the forecast for Australia's terms of trade had been revised down since that presented at the May meeting. Globally, core inflation had been stable in year-ended terms over recent months at rates below the targets of most central banks. Monetary conditions had remained very accommodative.

In China, GDP growth had picked up in the June quarter to be 7 per cent in year-ended terms. However, growth in a range of other indicators of activity had moderated in the first half of 2015. The

FOMC - Minutes of the Federal Open Market Committee

Posted by Forexsq 15 days ago (http://www.federalreserve.gov)
img In a joint session of the Federal Open Market Committee (FOMC) and the Board of Governors of the Federal Reserve System, the manager of the System Open Market Account (SOMA) reported on developments in domestic and foreign financial markets. The deputy manager followed with a discussion of System open market operations conducted by the Open Market Desk during the period since the Committee met on June 16-17. The Desk's overnight reverse repurchase agreement (ON RRP) operations continued to provide a soft floor for money market interest rates. The deputy manager also updated the Committee on plans for tests of the Term Deposit Facility in August and of term RRPs at the end of the third quarter.

The staff next summarized some of the recent steps the System had taken to prepare further for the process of normalization of monetary policy. The staff also proposed that future changes in the FOMC's target federal funds rate range as well as associated changes in related administered inter

Draghi Unveils Revamped QE Program as ECB Downgrades Outlook

Posted by Forexsq 11 hours ago (http://www.bloomberg.com)
img Mario Draghi unveiled a revamp of quantitative easing to allow for more purchases of each euro member’s debt as the weaker global outlook prompted a wholesale reduction of officials’ economic forecasts through 2017.

The European Central Bank president said in Frankfurt on Thursday that the Governing Council has now set a potential purchase limit of 33 percent of any given bond, from 25 percent previously. The euro slid to a two-week low as Draghi said the emerging-market rout threatened global expansion and that consumer prices may barely grow this year.

“The information available indicates a continued, though somewhat weaker, economic recovery and a slower increase in inflation rates compared with earlier expectations,” Draghi told reporters. “Taking into account the most recent developments in oil prices and recent exchange rates, there are downside risks” to the inflation forecast, he said.

The move to reset the ECB’s stimulus program after a six-month review, which will b

Bank of England maintains Bank Rate at 0.5%

Posted by Forexsq 28 days ago (http://www.bankofengland.co.uk)
img The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy in order to meet the 2% inflation target and in a way that helps to sustain growth and employment. At its meeting ending on 5 August 2015, the MPC voted by a majority of 8-1 to maintain Bank Rate at 0.5%. The Committee voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion, and so to reinvest the £16.9 billion of cash flows associated with the redemption of the September 2015 gilt held in the Asset Purchase Facility.

CPI inflation fell back to zero in June. As set out in the Governor’s open letter to the Chancellor, around three quarters of the deviation of inflation from the 2% target, or 1½ percentage points, reflects unusually low contributions from energy, food, and other imported goods prices. The remaining quarter of the deviation of inflation from target, or ½ a percentage point, reflects the past weakness of domestic cost gro

Federal Reserve issues FOMC statement

Posted by Forexsq 36 days ago (http://www.federalreserve.gov)
img Press Release

Release Date: July 29, 2015
For immediate release

Information received since the Federal Open Market Committee met in June indicates that economic activity has been expanding moderately in recent months. Growth in household spending has been moderate and the housing sector has shown additional improvement; however, business fixed investment and net exports stayed soft. The labor market continued to improve, with solid job gains and declining unemployment. On balance, a range of labor market indicators suggests that underutilization of labor resources has diminished since early this year. Inflation continued to run below the Committee's longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of non-energy imports. Market-based measures of inflation compensation remain low; survey‑based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster m

ECB monetary policy decisions

Posted by Forexsq 49 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

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

Posted by Forexsq 113 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

RBA Monetary Policy Decision by Glenn Stevens

Posted by Forexsq 149 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

BOE to stress test banks for financial crisis

Posted by Forexsq 157 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 170 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 175 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 176 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 182 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 182 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 183 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
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