Consensus for an October European Central Bank rate cut basically locked in
/0 Comments/in Central Banks, Uncategorized Echo_11 /by euitsolsA note from Commerzbank on what is expected from the European Central Bank on October 17. TLDR is a 25bp rate cut.
The analysts argue that the primary driver behind the European Central Bank’s (ECB) current stance is the collapse of eurozone inflation expectations. Market participants recognize that this gives the ECB a solid rationale for maintaining loose monetary policy. Commerz say the ECB will have to revise its projected rate path lower.
And, on the euro, they say that subdued inflation supports the euro by slowing the erosion of its domestic purchasing power, but on the other hand, low interest rates remain a negative factor. Overall, though, they conclude that the outlook for the euro appears bleak. The downward revision of inflation expectations heightens the risk of Europe slipping back into a state of ‘lowflation,’ which could compel the ECB to keep interest rates as low as possible without trigger a pick up in inflation.
The @Newsquawk Fed Speak Primer: Schmid, Bostic and Kashkari scheduled
/0 Comments/in Central Banks, Uncategorized Echo_11 /by euitsolsFed Speak Primer: Schmid, Bostic and Kashkari scheduled
SCHEDULE
(BST / EDT)
15:00 / 10:00: Fed’s Schmid (2025 Voter, Neutral) to give opening remarks at a conference
15:40 / 10:40: Fed’s Bostic (2024 Voter, Hawk) and Kashkari (2026 Voter, Hawkish) to speak on “Featuring Frontier Research to Enhance Economic Opportunity and Inclusive Growth”; No Text, but there will be Q&A..
Canadian dollar expected to strengthen in 2025 as rate cuts boost economy
/0 Comments/in Central Banks, Uncategorized Echo_11 /by euitsolsThe Canadian dollar is forecast to extend its recovery against its U.S. counterpart in the coming year as lower borrowing costs bolster economic growth in Canada and increase investor appetite for risk, a Reuters poll found.
Canada’s loonie has rallied by 3.3% since hitting a near two-year low of 1.3946 per U.S. dollar, or 71.71 U.S. cents, in August.
The median forecast of nearly 40 foreign exchange analysts in the Sept. 30–Oct. 2 poll showed the loonie consolidating those gains in three months, edging 0.1% lower to 1.3514, but remaining stronger than the 1.3650 expected in a September poll.
In a year, the currency was predicted to advance 1.7% to 1.3275, compared to 1.3333 seen previously.
The Bank of Canada is expected to continue reducing its benchmark interest rate over the coming months after cutting it by 75 basis points since June to 4.25%, while the U.S. Federal Reserve began its own easing campaign in September.
Japan’s Finance Minister Kato’s comments on the BoJ / JPY
/0 Comments/in Central Banks, Uncategorized Echo_11 /by euitsols
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Post-Gov Bailey’s comments – GBP analysis via @Capital_Edge_
/0 Comments/in Central Banks, Uncategorized Echo_11 /by euitsolsSome analysis by my dear friend, ForexLive contributor and all-round gent, Arno Venter…
GBP post-Bailey’s comments
LINK – Bank of England Governor talks “bit more aggressive” interest rate cuts
BoE comments from today playing catch up with the overall trend in economic data surprises over the past few weeks?
Sizeable reaction in Sterling compared to the size in rate cut expectations for the BoE after Bailey’s comments.
About 3 basis points of easing added for the Nov meeting, think the size of the reaction might be more positioning related.
Tracking net commercial positioning as a percentage of open interest, the Pound was the third biggest long over the past 52 weeks.
The reaction today (despite a relatively small rate repricing) arguably reflects positioning unwinds more than anything else.
September 2024 BoE Decision Maker Panel Data: Inflation and Wage Growth Insights
/0 Comments/in Central Banks, Uncategorized Echo_11 /by euitsols
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Bank of England Governor talks “bit more aggressive” interest rate cuts
/0 Comments/in Central Banks, Uncategorized Echo_11 /by euitsolsIn an exclusive interview with the Guardian – Bailey held out the prospect of the Bank becoming a “bit more aggressive” in cutting interest rates provided the news on inflation continued to be good.
He also hit back at claims by the former prime minister Liz Truss that the Bank of England was part of a “deep state” that had set out to thwart her plans. Truss’s problems were of her own making, the governor said.
GBP was offered on the release of the article.
Fed speakers Thursday include Kashkari and Bostic
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Asia market FX intervention
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FOREXLIVE™ is not an investment advisor, FOREXLIVE™ provides references and links to selected news, blogs and other sources of economic and market information for informational purposes and as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically hereby acknowledges clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided on an “as-is” basis as a general market commentary and does not constitute investment or trading advice, and we do not purport to present the entire relevant or available public information with respect to a specific market or security. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information, or with respect to any of the content presented within its website, nor its editorial choices.
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