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Firm dollar drags yen down closer to intervention range
  + stars: | 2024-04-23 | by ( )   time to read: +4 min
A firm U.S. dollar had the yen locked near a fresh 34-year low on Tuesday, keeping investors on heightened intervention watch as they looked ahead to key U.S. inflation report and the Bank of Japan's rate decision this week. A firm U.S. dollar had the yen locked near a fresh 34-year low on Tuesday, keeping investors on heightened intervention watch as they looked ahead to key U.S. inflation report and the Bank of Japan's rate decision this week. Traders have been keeping wary eye as yen slips towards 155.00, a level considered by many participants as the new trigger for intervention by Japanese authorities. The weak yen complicates the BOJ's policy path, with some market players betting the central bank could come under pressure to hike rates sooner than it wants to slow the currency's decline. Markets are currently pricing in a 46% chance of the Fed's first rate cut starting in September, with November not far behind at 42%, according to the CME FedWatch Tool.
Persons: Carol Kong, Shunichi Suzuki, BoE, Sterling, bitcoin Organizations: Bank of, Traders, Bank of Japan's, Commonwealth Bank of Australia, Japan's Finance, Federal Reserve, Investors, Commonwealth Bank of Australia's, European Central Bank, Bank of England Locations: Japan, Iran, Israel, Tokyo, Japan's, U.S, Commonwealth Bank of Australia's Kong
European markets are heading for a higher open Tuesday, building on positive momentum in the previous session. Regional markets closed higher Monday, buoyed by a rebound in tech stocks on Wall Street, and the U.K.'s FTSE 100 clocked its fourth daily gain Monday and surpassed its previous record close set on Feb. 20, 2023. U.K. stocks were boosted, while sterling tumbled against the U.S. dollar as investors raised bets on a summer interest rate cut from the Bank of England. Investors in the region are looking ahead to bank earnings this week, and will be keeping an eye on a range of tech earnings stateside, with Tesla reporting during U.S. trading hours Tuesday.
Organizations: U.S, Bank of England, Investors
“During some periods both the cost of buying (down payments) and the cost of owning (mortgage repayments) have been high. Mortgage rates biteThe average mortgage repayment has rocketed since late 2021 as the Bank of England, along with other major central banks, began jacking up official interest rates to bring down inflation. (The interest rate on some government bonds is used to set mortgage rates). On Monday, the average rate on a two-year fixed-rate mortgage stood at 5.82%, according to data from product comparison website Moneyfacts. “An election is due within the next year and a new government, committed to helping prospective first-time buyers, might start by acknowledging the challenges younger generations face not just in housing but more generally,” the BSA said.
Persons: Liz Truss, Organizations: London CNN, Building Societies Association, BSA, Office, National Statistics, Bank of England, UK Finance Locations: United Kingdom, London, England, Wales
Liz Truss was the prime minister of Britain for 49 days in 2022, an interregnum between Boris Johnson and Rishi Sunak that was so short it was outlasted by a lettuce. If this were the 19th century, Ms. Truss would have perhaps exiled herself to a country estate where peacocks roamed the grounds or fought her enemies with pistols. (In 1809 the foreign secretary, George Canning, was wounded in a duel with the war minister.) A. Disgrace” — but was never really considered a likely leader of the Conservative Party until her predecessor Mr. Johnson almost burned the party down. (Even Mr. Canning, who survived his wounds and eventually became prime minister, lasted longer.
Persons: Liz Truss, Boris Johnson, Rishi Sunak, Queen Elizabeth II, George Canning, Truss, Truss’s, Margaret Thatcher, , Johnson, Canning Organizations: Liberal, Liberal Democrats, European Union, Conservative Party, Bank of England Locations: Britain
Currencies calm but cautious after a weary week
  + stars: | 2024-04-22 | by ( )   time to read: +3 min
U.S. one hundred dollar bills are being shown in this picture illustration taken in Buenos Aires, Argentina, on Dec. 15, 2023. Eyes are on the yen this week, with the Bank of Japan's, or BOJ, Friday policy review the notable item on the economic calendar. The yen has been one of the biggest losers against the dollar this year, with losses mounting to 9%. The ECB's Robert Holzmann, however, said the ECB probably will not cut rates this year as much as planned if the Fed does not move. BoE Governor Andrew Bailey and Deputy Governor Dave Ramsden alluded last week to Britain's inflation slowing as expected.
Persons: Chris Weston, Weston, Kazuo Ueda, BoE, ECB policymaker Madis Muller, Christine Lagarde, Robert Holzmann, BoE Governor Andrew Bailey, Dave Ramsden, Sterling, Bitcoin Organizations: U.S ., Bank of Japan's, Federal Reserve, Monetary Fund, Bank, Washington , Bank of Japan, European Central Bank, Bank of England, ECB policymaker, ECB, Treasury Locations: Buenos Aires, Argentina, East, Tehran, Iran, Washington, United States, Japan, South Korea, Washington ,, U.S
European stock markets are set to open sharply lower Friday, rounding off a week in which escalating tensions in the Middle East and repricing of interest rate expectations have been in focus. After a strong start to 2024, the index is heading for its first monthly loss of the year in April. In the latest back-and-forth between the countries, Israel launched a limited direct military attack on Iranian soil early Friday morning. Investors are monitoring a slew of commentary on the path of interest rates emerging from the International Monetary Fund's Spring Meetings in New York. But markets have become significantly less confident there will be a June cut from the U.S. Federal Reserve or Bank of England, after two hotter-than-expected inflation prints.
Persons: François Villeroy de Galhau, Christine Lagarde Organizations: International, European Central Bank, CNBC, U.S . Federal Reserve, Bank of England Locations: Israel, New York
The Bank of England could still cut interest rates in May, Morgan Stanley has said, in an increasingly rare call of confidence as market sentiment supporting such a move wanes. "We still entertain a May rate cut," chief economist Jens Eisenschmidt told CNBC's "Street Signs" on Wednesday, reiterating the bank's commitment to an earlier call. The Wall Street bank's contrarian view is now some way off consensus, which currently prices in an initial BOE rate cut in September, according to LSEG data. "In general, the central banks are all, to some extent, in the same boat. Morgan Stanley on Monday revised its ECB rate cut forecast, following an earlier revision in its Fed outlook.
Persons: Morgan Stanley, Jens Eisenschmidt, CNBC's, BOE, Andrew Bailey, Morgan Stanley's, Eisenschmidt, there's Organizations: Bank of England, European Central Bank, ECB Locations: City of London, London, United Kingdom, Europe, U.S
Food prices provided the biggest downward drag on the headline rate, the ONS said, while motor fuels pushed it higher. The core figure, excluding energy, food, alcohol and tobacco, came in at 4.2%, compared with a projection of 4.1%. Services inflation, a key watcher for U.K. monetary policymakers, declined from 6.1% to 6% — again above the expectations of both economists and the BOE. This week, investors have been monitoring signs of a cooling U.K. labor market, with unemployment unexpectedly rising to 4.2% in the period between December and February. The central bank's own forecast is for inflation to "briefly drop" to its 2% target in the spring before increasing slightly.
Persons: BOE, BOE Governor Andrew Bailey Organizations: National Statistics, Bank of England, Reuters, Federal Reserve Locations: U.S
Consumer prices in Britain rose at the slowest rate in two and a half years, the country’s Office for National Statistics reported on Wednesday. Inflation was 3.2 percent in the year through March, down from 3.4 percent in February but a touch higher than the 3.1 percent economists expected, a sign that the path to cooler inflation could be bumpy. Core inflation, which strips out volatile food and energy prices, was 4.2 percent, down from 4.5 percent the month before. Economists expect inflation to continue to slow over the next few months, possibly going below the Bank of England’s target of 2 percent, as household energy bills fall. Britain’s unemployment rate rose more than expected in its latest reading, published this week.
Organizations: National Statistics, Bank of Locations: Britain
Those what-ifs could further roil gas and oil prices. But if there’s further conflict, he said, “you’d see a much higher premium for oil prices. If there’s a de-escalation of tensions between Israel and Iran, they said, oil prices should come down over the next few weeks. But if there’s an escalation in conflict, they expect that oil prices could jump to more than $100 per barrel, they wrote in a note Monday. Retail sales rose 0.7% in March from the prior month, a slower pace than February’s upwardly revised 0.9% gain, the Commerce Department reported Monday.
Persons: New York CNN —, JPMorgan Chase, Jamie Dimon, ” Dimon, Jerome Powell, We’ll, Christine Lagarde, Andrew Bailey, Dave Sekera, Israel doesn’t, , , Moody’s, there’s, Chris Isidore, Pete Muntean, Sam Salehpour, Read, Bryan Mena, Claire Tassin Organizations: CNN Business, Bell, New York CNN, Dow, JPMorgan, International Monetary Fund, IMF, Bank, Bank of Canada, Seven, European Central Bank, Bank of England, Morningstar, Nvidia, AMD, Wall Street Journal, Federal Reserve Bank of New, Boeing, Federal Aviation Administration, Alaska Airlines, Commerce Department, Morning, Amazon Locations: New York, Russia, Ukraine, China, United States, Washington ,, Iran, Israel, Federal Reserve Bank of New York
CNN —Prince William and Prince George were spotted watching their soccer team Aston Villa together on Thursday evening - their first sighting since the Princess of Wales’ cancer diagnosis. Royal-watchers were thrilled to see Prince William at the game on Thursday evening. Catherine Ivill/AMA/Getty ImagesCatherine revealed in a powerful video message on March 22 that she had started treatment after being diagnosed with cancer. Specifically, they are eyeing up the D-Day 80th anniversary ceremony in Normandy, France on June 6 or his birthday parade through central London a week later. One trip the King did manage to get sign-off from doctor’s on was an escape to Scotland for a very special occasion.
Persons: CNN — Prince William, Prince George, Princess, Wales, Prince of Wales, Prince William, Catherine Ivill, Catherine, King Charles III, he’ll, Duke, Duchess, Prince Edward, Sophie, Victoria Jones, Edward, Charles, Andrew Bailey, Sarah John, Yui Mok, King, Camilla Organizations: CNN’s Royal, CNN, Aston Villa, Lille, Europa Conference League, Kensington Palace, Entente, France's Gendarmerie Garde, Guard, Getty, London, Bank of England Locations: British, Villa, Birmingham, Windsor ., Kensington, Edinburgh, Buckingham, London, Paris, Normandy, France, doctor’s, Scotland, Birkhall, Balmoral
The Bank of England said on Friday that it would overhaul the way it forecasts its outlook for the British economy as part of a “once-in-a-generation” review of its process after it was criticized for underestimating inflation. After a few turbulent years — which included a pandemic, the war in Ukraine and a surge in inflation — the central bank was accused of bungling its economic forecasts. It has since set out to find ways to convey more clearly what it thinks will happen to economic growth and inflation, especially in times of high economic uncertainty. “We have a once-in-a-generation opportunity to update our approach, in a world that, I’m afraid, remains highly uncertain,” said Andrew Bailey, the governor of the Bank of England. The bank asked a former Federal Reserve chair, Ben S. Bernanke, to lead the review.
Persons: , Andrew Bailey, Ben S, Bernanke Organizations: of England, Bank of England, Federal Reserve Locations: Ukraine
LONDON — The Bank of England on Friday announced a "once in a generation" overhaul of its inflation forecasting following a long-awaited review by former Federal Reserve Chair Ben Bernanke. The review — initiated following criticism of the central bank's recent policymaking — sets out 12 recommendations which BoE Governor Andrew Bailey said the bank was committed to implementing. They include the scrapping of the Bank's long-held "fan chart" forecasting system and the introduction of a revamped forecast framework. It added that the BoE currently relies more heavily than other central banks on a central forecast, which may not fully account for wider risks or how inflation expectations can become "de-anchored." Additionally, the review said the bank needed to improve its communication with the public, suggesting the it put less emphasis on the central forecast, simplify its policy statement, and reduce repetitiveness."
Persons: Ben Bernanke, , BoE, Andrew Bailey, Bailey Organizations: Bank of England, City of, Federal, CNBC, Monetary, Bank Locations: City, City of London, United Kingdom, U.S
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailUK inflation data doesn't support rate cuts until end of the year, former BOE member saysEconomist DeAnne Julius, former member of the Bank of England, discusses the Bernanke review of the BOE's forecasting methods, and when the central bank will start to look at rate cuts.
Persons: BOE, DeAnne Julius Organizations: Bank of England
The U.S. Federal Reserve is likely to cut interest rates before the European Central Bank does, a former member of the Bank of England said, defying current market expectations. Investors are closely monitoring central bank moves on the back of a considerable reduction in inflation across major economies. So far, Switzerland was the first major economy to cut interest rates back in late March. Market players are currently pricing in a 92.8% chance that the ECB will cut rates in June from the historically high level of 4%, according to LSEG data. Her comments come just ahead of a European Central Bank meeting due on Thursday.
Persons: DeAnne Julius, Julius, Christine Lagarde, Lagarde Organizations: U.S . Federal, European Central Bank, Bank of England, Monetary, CNBC, Tuesday, ECB, Federal Reserve Locations: Switzerland, U.S, United States
Former Federal Reserve Board Chair Ben Bernanke speaks during a discussion on "Perspectives on Monetary Policy" during the Thomas Laubach Research Conference at the Federal Reserve Board building in Washington, DC, May 19, 2023. LONDON — The Bank of England will on Friday publish a long-awaited review by former Federal Reserve Chair Ben Bernanke that could lead to significant changes in its monetary policymaking. The review was launched last summer to assess the Bank's struggles to accurately project the huge global spike in inflation, following Russia's invasion of Ukraine. The first deals with how the Bank of England communicates uncertainty around its central forecasts. The "fan chart" is the Bank's long-held method of presenting the probability distribution that forms the basis of its inflation forecasts.
Persons: Ben Bernanke, BOE, Goldman Sachs, Bernanke, Goldman, Jari Stehn, James Moberly, Stehn Organizations: Federal Reserve, Thomas Laubach Research, Federal Reserve Board, LONDON, Bank of, Federal, MPC, Bank of England, Bank Locations: Washington , DC, Bank of England, Ukraine
Why gold prices are at record highsFrom central banks to Costco customers, it seems everyone is buying gold these days, reports CNN’s John Towfighi. Central banks see gold as a long-term store of value and a safe haven during times of economic and international turmoil. When interest rates fall, gold prices tend to rise, as bullion becomes more appealing than income-paying assets like bonds. The People’s Bank of China bought gold for the 17th straight month in March, adding 160,000 ounces to bring reserves to 72.74 million troy ounces of gold, according to Reuters. The Honest Company posted a strong fourth quarter in March.
Persons: , ” Mark Carney, , GFANZ, Jamie Dimon, ” Dimon, JPMorgan, CNN’s John Towfighi, China —, Read, Jessica Alba, Ramishah Maruf, Alba’s, Chuck Organizations: CNN Business, Bell, New York CNN, European Central Bank, Glasgow Financial Alliance, UN, Bank of England, ECB, MIT, Columbia Business School, Zero Banking Alliance, United Nations, decarbonization, CNN, JPMorgan Chase, State, JPMorgan, Investors, Federal Reserve, China, People’s Bank of China, Reuters, UBS, The Honest, The Honest Company, Honest, Nasdaq Locations: New York, Glasgow, China, India, Turkey
“There are,’’ the Bank of England warns, “more consequences from falling prices than meets the eye.’’What could be so bad about lower prices? It is only now emerging from decades of falling prices that began with the collapse of its property and financial markets in the early 1990s. Mainly because falling prices tend to discourage consumers from spending. Why buy now, after all, if you can purchase what you want — cars, furniture, appliances, vacations — at a lower price later? If consumers were to pull back, en masse, to await lower prices, businesses would face intense pressure to cut prices even more to try to jump-start sales.
Persons: they're, that's, what's, Joe Biden's, ’ ’ Lisa Cook, , United States hasn’t, Tom Krisher Organizations: WASHINGTON, Federal Reserve's Board of Governors, Bank of England, United, España, Unemployed, Bank of Japan, Fed, Bank for International, AP Locations: America, United States, Japan, Spanish, Detroit
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBank of England could cut rates before the Fed as U.K. inflation eases, strategist saysLindsay James, investment strategist at Quilter Investors, outlines the outlook for global monetary policy and stock markets.
Persons: Lindsay James Organizations: Email Bank of England, Fed, Quilter
The US government's ballooning interest payments are eating a hole in its budget, they said. "We are headed toward record spending levels, record deficit levels, record debt levels, record interest payments — the list goes and on," Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, told Fox Business this week. While the US isn't at imminent risk of that kind of chaos, bond markets could "snap back" if the government's interest payments soar to $1 trillion in 2026 as expected, Swagel said. AdvertisementHowever, she noted that some experts on Wall Street were "incredibly worried" about the national debt and interest payments. DoubleLine Capital CEO Jeffrey Gundlach has also sounded the alarm on debt payments.
Persons: , MacGuineas, Philip Swagel, Liz Truss, Swagel, bitcoin, Jim Rogers, George Soros, He's, Jeffrey Gundlach Organizations: Investors, Service, Federal Budget, Fox Business, Congressional, Office, Financial Times, Bank of, CBO, Wall, DoubleLine
In an interview with the Financial Times, CBO director Phillip Swagel said US government debt — which the Treasury Department puts at nearly $35 trillion — is on an “unprecedented” trajectory. UK government bonds, or gilts, and the pound sold off sharply, partly in response to plans by Truss to issue more debt in order to pay for tax cuts. Mortgage rates and other borrowing costs soared as investors demanded much higher premiums for owning UK debt. He has promised to extend his 2017 tax cuts and has also spoken about reducing the corporate tax rate from the current 21% to 15%. “I will make the Trump tax cuts the largest tax cut in history,” he said last month at the Black Conservative Federation’s Honors Gala in South Carolina.
Persons: Phillip Swagel, Liz, , Truss, ” Swagel, Dave Ramsden, Donald Trump’s, Joe Biden, Fitch, , Trump Organizations: London CNN, Congressional, Financial Times, Treasury Department, CNN, Bank of England, Democrats, Trump, Black Conservative, US Treasury, Federal, CBO Locations: United States, United Kingdom, South Carolina
The dollar was on the front foot on Monday and kept the yen pinned near a multi-decade low, though the threat of currency intervention from Japanese authorities prevented the greenback from heading further north. "Japanese officials' verbal intervention is making 152 a very strong near-term resistance for dollar/yen," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "Markets are fully aware of a potential actual FX intervention from authorities, so I think that's keeping dollar/yen from moving substantially higher. "I think there is still a high risk that they will come in to prop up the yen if dollar/yen were to surge materially perhaps to 155. The yuan has been pressured by growing market expectations of further monetary easing to prop up the world's second-largest economy.
Persons: Carol Kong, That's, BoE, Andrew Bailey, Chris Weston Organizations: Bank of Japan's, Commonwealth Bank of Australia, Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, Sterling, Financial Times, ECB, New Zealand Locations: Japan, United States
Tokyo’s Nikkei 225 index rose 0.7% to 40,003.60, while the dollar rose to 150.35 Japanese yen from 149.14 yen. Australia's S&P/ASX 200 added 0.4% to 7,703.20 after Australia’s central bank kept its benchmark interest rate steady at 4.35% for a third consecutive meeting. This week's highlight for Wall Street will likely be the Federal Reserve’s meeting on interest rates, which ends on Wednesday. The widespread expectation is for the central bank to hold its main interest rate steady at its highest level since 2001. But Fed officials will also give updated forecasts for where they see interest rates heading this year and in the long run.
Persons: Australia's, Tesla, Stephen Scherr, Wayne “ Gil ”, He’s, It's Organizations: Bank of Japan, Nikkei, Reserve Bank, Bank of England, Dow Jones, Nasdaq, Nvidia, Big Tech, Hertz Global Holdings, Cruise, Delta Air Lines, Boeing, Workers, New York Mercantile Exchange, Brent Locations: BANGKOK, Asia, Shanghai, Seoul, U.S, Oregon, San Francisco
Dollar steady, yen soft as BOJ policy shift beckons
  + stars: | 2024-03-18 | by ( )   time to read: +3 min
In this photo illustration, a person is seen holding 100, 50, and 5 U.S. dollar bills in his hand. Tom Kenny, senior international economist at ANZ, said an end to negative interest rate policy is likely to reflect a 10-basis-point hike taking the current policy rate from -0.1% to 0.0%. "We expect this to be a dovish hike with the BOJ unlikely to signal its intention to hike again soon." The focus has shifted to whether the policymakers will make any changes to their projections of rate cuts, or dot plots for this year. The Fed in December projected 75 basis points, or three rate cuts, of easing in 2024.
Persons: Kazuo Ueda, Tom Kenny, Powell, bitcoin Organizations: U.S, Bank of Japan, Federal Reserve, ANZ, Beyond, Reuters, New Zealand, Bank of England, Fed, NatWest Locations: Japan, United States, England, Australia, Norway, Switzerland, Mexico, Brazil, Indonesia, Asia, Beyond Japan, Australia's, U.S, cryptocurrencies
The Bank of Japan (BOJ) headquarters is seen beyond the cherry blossoms in Tokyo on March 20, 2023. Asia-Pacific markets were set for a mixed open Monday as investors brace for a week of central bank meetings. The U.S. Federal Reserve will start its Federal Open Market Committee meeting on Tuesday. A Reuters poll of economists is expecting the Fed to hold its benchmark interest rates steady at 5.25% to 5.5%. In Asia, the Reserve Bank of Australia is expected to keep its cash rate steady at 4.35% when it concludes its meeting on Tuesday.
Organizations: Bank of Japan, U.S . Federal Reserve, Open, Reserve Bank of Australia, Bank of England Locations: Tokyo, Asia, Pacific, Europe
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