The combination of the recently announced TLTRO-III and extension of the ECB’s forward interest rate guidance – committing to keeping policy rates at low levels for longer – has caused the Eonia forward curve to flatten. Having started to price in a modest 10bps hike a month ago, the market now expects no change in policy rates over the next 18 months. Even with policy rates in negative territory, the balance of risks is not […] Read More
Barclays: • Expect no policy announcements but lively Q&A. • As highlighted in the March minutes, GC members have raised concerns about the impact of low rates on bank profitability, bank intermediation and financial stability. This was followed by comments from Chief Economist Peter Praet who indicated that the ECB was looking into options including deposit tiering. • Even if the ECB were to introduce tiering, this would not be until the summer at the […] Read More
By Mark Cudmore (Bloomberg) — The WTI rise has just gone critical for the Treasuries market. Monday was the first time since November that WTI was up on a y/y basis. That will make the inflation impact far more real and see yields climb until WTI turns back negative y/y. In fact, charting WTI versus the same contract lagged by one year provides an exceptional guide to how U.S. yields will move. The last period […] Read More
Only Donald Trump could nominate two such unsuitable candidates to the board of the world’s most powerful central bank. He has nominated Herman Cain, a former chief executive of Godfather’s Pizza who heads a political action committee raising funds to support Trump’s re-election, and Stephen Moore, an economist with the conservative Heritage Foundation who was an adviser to both Cain’s attempt to win the Republican nomination in 2012 and Trump’s campaign in 2016. Cain is […] Read More
RBC Sees RBA Shifting to Easing Bias in May, Cuts in Aug. & Nov. 2019-04-08 04:03:46.158 GMT By Michael Heath (Bloomberg) — RBC economists led by Su-Lin Ong say there’s a risk interest-rate cuts could come sooner, depending on how the housing market unfolds. * Activity probably won’t be strong enough to prevent more significant weakening in the labor market. “A further weakening in the leading indicators of residential construction, house prices, household consumption and […] Read More
Fed May Bow to Trump’s Call for Rate Cuts If Inflation Softens 2019-04-07 13:00:00.0 GMT By Rich Miller (Bloomberg) — With his call for lower interest rates, President Donald Trump has weighed into a debate inside the Federal Reserve about what central bankers should do about sub- par inflation. It’s not totally crazy to think he’ll eventually carry the day. In advocating easier credit, Trump and senior economic adviser Larry Kudlow have harped on the […] Read More
The Wall Street Journal: With the Fed on hold, and its next move uncertain, investors want to keep their options open https 2019-04-08 08:15:05.492 GMT The Wall Street Journal @WSJ With the Fed on hold, and its next move uncertain, investors want to keep their options open on.wsj.com/2UnG0fR Sent via SocialFlow. View original tweet. Twitter profile information as of April 8, 2019 Description: Breaking news and features from the WSJ. Tweets: 272683 Following: 1126 Followers: […] Read More
By Rich Miller (Bloomberg) — With his call for lower interest rates, President Donald Trump has weighed into a debate inside the Federal Reserve about what central bankers should do about sub-par inflation. It’s not totally crazy to think he’ll eventually carry the day. In advocating easier credit, Trump and senior economic adviser Larry Kudlow have harped on the paucity of inflation to justify their call for a change of course by the central bank, […] Read More
Top US and Chinese officials have resolved most of the issues standing in the way of a deal to end their long-running trade dispute but are still haggling over how to implement and enforce the agreement, people briefed on the talks have said. Liu He, China’s vice-premier, was preparing to meet Robert Lighthizer, the US trade representative, and Steven Mnuchin, the US Treasury secretary, for a potentially climactic negotiation session starting Wednesday in Washington. The […] Read More
MNI SOURCES: ECB Tiering More Likely If Rates Cut Further –Draghi Comments, Prompting Tiering Talk, Surprised Other ECB Officials –Tiering More An Option If Rates More Deeply Negative, Officials Say LONDON (MNI) – The European Central Bank would be more likely to tier its deposit rate if it cut it to more deeply negative levels, something which is not now probable, ECB sources told MNI, adding that comments by Mario Draghi which prompted speculation that […] Read More
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