<![CDATA[Hedgehogs.net: Ken Yeadon's connections' blogs]]> http://www.hedgehogs.net/pg/blog/keny/friends/?view=rss http://www.hedgehogs.net/pg/blog/asiablues/read/11646106/the-market-is-really-nervous-right-now-video Fri, 21 Oct 2016 15:53:45 +0100 http://www.hedgehogs.net/pg/blog/asiablues/read/11646106/the-market-is-really-nervous-right-now-video <![CDATA[The Market Is Really Nervous Right Now (Video)]]> By EconMatters

The strong dollar is putting a lot of pressure on asset prices globally, and especially other currencies pegged to the US Dollar, and it moving higher is making market participants quite nervous right here. A lot of Risk Assets rely on a weaker Dollar.

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646082/ecb-maintains-rates-as-growth-risks-tilted-to-downside Thu, 20 Oct 2016 16:24:59 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646082/ecb-maintains-rates-as-growth-risks-tilted-to-downside <![CDATA[ECB maintains rates as growth risks tilted to downside]]>     The European Central Bank (ECB) left is key policy rates steady, as widely expected, but raised the prospect of changing its policy measures in December by underscoring that risks to economic growth "remain tilted to the downside" and it will continue to use all available instruments to ensure that inflation continues to rise.
    The ECB, which in March cut its benchmark refinancing rate to zero, confirmed that monthly asset purchases of 80 billion euros were still intended to run until the end of March 2017, or beyond if necessary to ensure that inflation is moving toward the target of just below, but close to 2 percent.
    But ECB President Mario Draghi said the ECB remained "committed to preserving the very substantial degree of monetary accommodation," a sign the ECB may either extend its asset purchases beyond March next year or adjust it to encompass other securities or loosen some of its restrictions.
     In December the ECB will update its economic forecasts through to 2019 while the governing council will also hear from committees about the options for ensuring that its purchase program is proceeding smoothly, addressing concerns the ECB is running out of bonds to buy.
    Draghi said the euro area economy in the third quarter had continued to expand at a rate that was "around the pace" of the second quarter and further ahead growth should proceed at a "moderate but steady pace."
    In the second quarter the euro zone economy grew by 0.3 percent from the first quarter for annual growth of 1.6 percent, down from 1.7 percent in the first quarter.
    In September the ECB revised upwards its 2016 growth forecast to 1.7 percent from 1.6 percent, but lowered its outlook for 2017 growth to 1.6 percent from 1.7 percent and its 2017 forecast to 1.6 percent from 1.7 percent.
    Domestic demand will continue to be supported by the ECB's easy policy and largely neutral fiscal policy in 2017 but Draghi said the recovery was still being dampened by subdue foreign demand, the necessary adjustments of balance sheets in a number of sectors and the sluggish pace of structural reforms, which he once again called on governments to accelerate to reduce unemployment and boost the potential growth.
    "Structural reforms are necessary in all euro area countries," said Draghi.
    Inflation in the euro area rose to 0.4 percent in September from 0.2 percent in August.
    In its latest forecast, the ECB expects inflation to average 0.2 percent this year, 1.2 percent in 2017 and 1.6 percent in 2018.

    The European Central Bank issued the following statement and ECB President Mario Draghi's introductory statement to a press conference:

"At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.
Regarding non-standard monetary policy measures, the Governing Council confirms that the monthly asset purchases of €80 billion are intended to run until the end of March 2017, or beyond, if necessary, and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim.
The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today."
ECB President Mario Draghi:

"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.
Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. We continue to expect them to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. Regarding non-standard monetary policy measures, we confirm that the monthly asset purchases of €80 billion are intended to run until the end of March 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. 
The information that has become available since our meeting in early September confirms a continued moderate but steady recovery of the euro area economy and a gradual rise in inflation, in line with our previous expectations. The euro area economy has continued to show resilience to the adverse effects of global economic and political uncertainty, aided by our comprehensive monetary policy measures, which ensure very favourable financing conditions for firms and households. Overall, however, the baseline scenario remains subject to downside risks.
Looking ahead, we remain committed to preserving the very substantial degree of monetary accommodation which is necessary to secure a sustained convergence of inflation towards levels below, but close to, 2% over the medium term. To that end, we will continue to act, if warranted, by using all the instruments available within our mandate. In December the Governing Council’s assessment will benefit from the new staff macroeconomic projections extending through to 2019 and from the work of the Eurosystem committees on the options to ensure the smooth implementation of our purchase programme until March 2017, or beyond, if necessary. 
Let me now explain our assessment in greater detail, starting with the economic analysis. Real GDP in the euro area increased by 0.3%, quarter on quarter, in the second quarter of 2016, after 0.5% in the first quarter. The latest data and survey results point to continued growth in the third quarter of 2016, at around the same pace as in the second quarter. Looking further ahead, we expect the economic expansion to proceed at a moderate but steady pace. Domestic demand should be supported by the pass-through of our monetary policy measures to the real economy. Favourable financing conditions and improvements in corporate profitability continue to promote a recovery in investment. Moreover, still relatively low oil prices and sustained employment gains, which are also benefiting from past structural reforms, provide additional support for households’ real disposable income and private consumption. In addition, the fiscal stance in the euro area will be broadly neutral in 2017. However, the economic recovery in the euro area is expected to be dampened by still subdued foreign demand, the necessary balance sheet adjustments in a number of sectors and a sluggish pace of implementation of structural reforms. The risks to the euro area growth outlook remain tilted to the downside and relate mainly to the external environment.
According to Eurostat, euro area annual HICP inflation in September 2016 was 0.4%, up from 0.2% in August. This reflected mainly a continued increase in annual energy inflation, while there are no signs yet of a convincing upward trend in underlying inflation. Looking ahead, on the basis of current oil futures prices, inflation rates are likely to pick up over the next couple of months, in large part owing to base effects in the annual rate of change of energy prices. Supported by our monetary policy measures and the expected economic recovery, inflation rates should increase further in 2017 and 2018.
Turning to the monetary analysis, broad money (M3) continued to increase at a robust pace in August 2016, with its annual rate of growth standing at 5.1%, after 4.9% in July. As in previous months, annual growth in M3 was mainly supported by its most liquid components, with the narrow monetary aggregate M1 expanding at an annual rate of 8.9% in August, after 8.4% in July.
Loan dynamics followed the path of gradual recovery observed since the beginning of 2014. The annual rate of change of loans to non-financial corporations stood at 1.9% in August 2016. The annual growth rate of loans to households also remained stable, at 1.8%, in August. Although developments in bank credit continue to reflect the lagged relationship with the business cycle, credit risk and the ongoing adjustment of financial and non-financial sector balance sheets, the monetary policy measures in place since June 2014 are significantly supporting borrowing conditions for firms and households and thereby credit flows across the euro area. 
The euro area bank lending survey for the third quarter of 2016 indicates some further improvements in both supply and demand conditions for loans to the non-financial private sector. Furthermore, banks continued to report that the ECB’s asset purchase programme and the negative deposit facility rate had contributed to more favourable terms and conditions on loans. 
To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need to preserve the very substantial amount of monetary support that is necessary in order to secure a return of inflation rates towards levels that are below, but close to, 2% without undue delay.
Monetary policy is focused on maintaining price stability over the medium term and its accommodative stance supports economic activity. As emphasised repeatedly by the Governing Council, and as again strongly echoed in both European and international policy discussions, in order to reap the full benefits from our monetary policy measures, other policy areas must contribute much more decisively, both at the national and at the European level. The implementation of structural reformsneeds to be substantially stepped up to reduce structural unemployment and boost potential output growth in the euro area. Structural reforms are necessary in all euro area countries. The focus should be on actions to raise productivity and improve the business environment, including the provision of an adequate public infrastructure, which are vital to increase investment and boost job creation. The enhancement of current investment initiatives, including the extension of the Juncker plan, progress on the capital markets union and reforms that will improve the resolution of non-performing loans will also contribute positively to this objective. In an environment of accommodative monetary policy, the swift and effective implementation of structural reforms will not only lead to higher sustainable economic growth in the euro area but will also make the euro area more resilient to global shocks. Fiscal policies should also support the economic recovery, while remaining in compliance with the fiscal rules of the European Union. Full and consistent implementation of the Stability and Growth Pact over time and across countries remains crucial to ensure confidence in the fiscal framework. At the same time, all countries should strive for a more growth-friendly composition of fiscal policies.
We are now at your disposal for questions."

http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646076/turkey-maintains-repo-and-overnight-rate-on-low-lira Thu, 20 Oct 2016 14:34:54 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646076/turkey-maintains-repo-and-overnight-rate-on-low-lira <![CDATA[Turkey maintains repo and overnight rate on low lira]]>     Turkey's central bank left its benchmark one-week repo rate steady at 7.50 percent but surprised financial markets by pausing in its policy of lowering the overnight funding rate, saying "recent developments in exchange rates and other cost factors restrain the improvement in the inflation outlook and thus necessitate the maintenance of a cautious monetary policy stance."
    The Central Bank of the Republic of Turkey (CBRT) has cut the overnight funding rate by 250 basis points to 8.25 percent since March, most recently last month, as part of a simplification of its monetary policy framework and efforts to stimulate demand and economic growth.
    But the benchmark rate, the one-week repo rate, has been maintained since February 2015 as the central bank tries to push down inflation.
    "The Committee stated that the direction and the timing of the next step in the monetary policy simplification process will be data dependent," the central bank said, adding its usual guidance that it will maintain a cautious policy stance and the outlook for inflation will determine its decisions.
    Turkey's headline inflation rate eased to 7.28 percent in September from 8.05 percent in August as food prices declined for the first on a monthly basis since 2003. The CBRT has forecast year-end inflation of 7.5 percent.
     While the exchange rate of the lira has weakened this year - on Tuesday it hit a record low of 3.11 to the U.S. dollar - it rose in response to the central bank's decision today.
    The lira was trading at 3.06 to the U.S. dollar shortly after news of the CBRT's decision to maintain rates, up from 3.07. But it is still down 4.6 percent compared with the the start of this year.
    Turkey's economy decelerated in the third quarter, the CBRT said, noting the decline in tourism revenue and moderate consumer lending. But the central bank said it expected domestic demand to start to recover in the fourth quarter, helped by recent supportive measures and incentives.
   Turkey's Gross Domestic Product grew by an annual rate of 3.1 percent in the second quarter, down from 4.7 percent in the first quarter.

    The Central Bank of the Republic of Turkey issued the following statement:

"The Monetary Policy Committee (the Committee) has decided to keep the short term interest rates constant at the following levels:
a) Overnight Interest Rates: Marginal Funding Rate has been kept at 8.25 percent, and borrowing rate has been kept at 7.25 percent,
b) One-week repo rate has been kept at 7.5 percent,
c) Late Liquidity Window Interest Rates (between 4:00 p.m. – 5:00 p.m.): Borrowing rate has been kept at 0 percent, and lending rate has been kept at 9.75 percent.
Recently released data and indicators regarding the third quarter display a deceleration in the economic activity. Reduced tightness in monetary conditions and the recent macroprudential measures support the overall financial conditions. The lagged effects of the terms of trade developments and the moderate course of consumer loans limit the widening in the current account balance driven by the decline in tourism revenues. Demand from the European Union economies continues to contribute positively to exports. With the supportive measures and incentives provided recently, domestic demand is expected to recover starting from the final quarter. The Committee assesses that the implementation of the structural reforms would contribute to the potential growth significantly.
The slowdown in aggregate demand contributes to the gradual fall in core inflation. Yet, the recent developments in exchange rates and other cost factors restrain the improvement in inflation outlook and thus necessitate the maintenance of a cautious monetary policy stance.
In light of these assessments, the Committee decided to keep the interest rates at current levels. The Committee stated that the direction and the timing of the next step in the monetary policy simplification process will be data dependent.
Future monetary policy decisions will be conditional on the inflation outlook. Taking into account inflation expectations, pricing behavior and the course of other factors affecting inflation, the cautious monetary policy stance will be maintained.
It should be emphasized that any new data or information may lead the Committee to revise its stance.
The summary of the Monetary Policy Committee Meeting will be released within five working days."

http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646071/indonesia-cuts-rate-another-25-bps-trims-growth-forecast Thu, 20 Oct 2016 13:34:55 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646071/indonesia-cuts-rate-another-25-bps-trims-growth-forecast <![CDATA[Indonesia cuts rate another 25 bps, trims growth forecast]]>     Indonesia's central bank cut is new benchmark interest rate by 25 basis points for the second month in a row to stimulate domestic demand, including credit, to stimulate domestic demand at a time that inflation will remain close to the floor of its target range and economic growth is slightly weaker than expected.
     Bank Indonesia (BI) cut its BI 7-day Reverse Repo Rate (BI 7-day RR Rate) to 4.75 percent from 5.0 percent, brining the total cut in that rate to 50 basis points following the cut in September.
    BI adopted the 7-day rate as its new benchmark rate in August to improve the transmission of its monetary policy decisions to money markets. Prior to August BI cut its previous benchmark rate, the BI rate, four times from January through June by a  total of 100 points.
    Indonesia's inflation rate rose to 3.07 percent in September from 2.79 percent in August but BI reiterated that inflation is expected to fall towards the floor of its target corridor of 3 - 5 percent.
    Indonesia's economy in the third quarter was slightly weaker than BI had expected and the impact of government spending is now seen as "somewhat limited" as spending is adjusted in the second half of this year.
    Sluggish world trade has also undermined the country's exports while the rupiah's exchange rate has continued to appreciate, making the country's exports less competitive.
    Economic growth this year is therefore expected to be around the lower end of the 4.9 percent to 5.3 percent range that BI has forecast, a slight downgrade in its forecast.
    In August BI cut its growth forecast to 4.9-5.3 percent  from a previous 5.0-5.4 percent and last month confirmed that expectation.
    Indonesia's Gross Domestic Product grew by an annual rate of 5.18 percent in the second quarter, up from 4.91 percent in the first quarter, but BI said consumption in the third quarter had remained limited and private investment, particularly non-construction investment, had remained weak.
     After being hit hard in 2013 - the year of the "taper tantrum" when the rupiah fell by 21 percent - the rupiah continued to depreciate until October 2015.
    Since then it has been rising on positive sentiment about the economy along with a tax amnesty that encouraged Indonesians abroad to repatriate funds.
    The rupiah was trading at 13,003 to the U.S. dollar today, up 6.1 percent this year.

    Bank Indonesia issued the following statement:

"The BI Board of Governors agreed on 19-20th October 2016 to lower the BI 7-day Reverse Repo Rate (BI 7-day RR Rate) 25 basis points (bps) from 5.00% to 4.75%, while also lowering the Deposit and Lending Facility rates 25 bps to 4.00% and 5.50% respectively, effective 21st October 2016. Bank Indonesia believes that the monetary easing is consistent with maintained macroeconomic stability, specifically inflation in 2016 that’s expected to fall near the floor of the target corridor, a better-than-expected current account deficit, bigger trade balance surplus and relatively stable exchange rate. Against a backdrop of global economic moderation, the eased monetary policy is expected to underpin efforts to stimulate domestic demand, including credit, in order to maintain economic growth momentum. Bank Indonesia will continue to coordinate with the government to ensure that inflation control, growth stimulus strenghtening, and implementation of structural reform, are well underway to support sustainable economic growth.
Global economic recovery remains slow and uneven. US growth has been revised downwards, while Europe and India are predicted to outperform previous projections. US growth was corrected on the back of weak consumption along with contractions in the investment sector. In line with that, the Federal Funds Rate (FFR) hike is expected to occur just once in 2016. Europe’s labour market improvements that elevated incomes and spurred consumption led to stronger growth than previously expected. On the other hand, stronger economic growth in India was supported by income gains that drove consumption. On the commodity markets, the global oil price remained low due to high OPEC production, while the prices of several export commodities from Indonesia improved, including coal, crude palm oil (CPO) and metal. 
On the home front, domestic economic growth in the third quarter was down slightly from the previous projection. Consumption was indicated to improve but remained limited. On the other hand, private investment, particularly non-construction investment, is estimated to remain weak in line with the large installed production capacity. Meanwhile, Bank Indonesia predicts the impact of fiscal stimuli to remain somewhat limited as the government adjusts spending in the second half of the year. Externally, global economic moderation and sluggish world trade have undermined improvements in the real sector exports, despite several commodity prices starting to rebound. Consequently, Bank Indonesia predicts 2016 economic growth to be around the floor of the 4.9-5.3% (yoy) range. 
Indonesia’s balance of payments is expected to record an increase of surplus, with a lower current account deficit. Current account deficit in the third quarter is estimated to fall below 2% of GDP, especially bolstered by trade surplus, in line with the rebound in primary commodity export price, as well as a decline of non-oil and gas imports. Indonesia’s trade balance recorded a surplus of USD2.09 billion in the third quarter, building on the USD1.92 billion posted in the second quarter. On the other hand, non-residents booked a net capital inflow of USD12.1 billion to financial markets in Indonesia, exceeding the overall total for 2015. Consequently, the position of official reserve assets at the end of September 2016 stood at USD115.7 billion, equivalent to 8.9 months of imports or 8.5 months of imports and servicing government external debt, which is well above the international adequacy standard of three months. 
The rupiah remained stable with a tendency of appreciating. The rupiah appreciated by an average of 0.41% to a level of Rp13,110 per USD. The appreciation continues and on the third week of October, the Rupiah closed at a level of Rp13,005 per USD. At home, positive sentiment concerning the domestic economy, stemming from maintained macroeconomic stability together with sound implementation of the Tax Amnesty, bolstered rupiah appreciation. Externally, the rupiah appreciated as global risk surrounding the timing of the proposed FFR hike eased. Moving forward, Bank Indonesia will continue to maintain exchange rate stability in line with the rupiah’s fundamental value. 
Bank Indonesia expects inflation to remain under control at a low level and, by the end of 2016, to fall towards the floor of the 4±1% target corridor. The Consumer Price Index (CPI) recorded inflation of 0.22% (mtm) in September 2016, which is considered under control and consistent with historical trends. Consequently, CPI inflation stood at 1.97% (ytd) and 3.07% (yoy). Core inflation remained stable at 3.21% (yoy) along with weak domestic demand, a decrease in global commodity price, and a relatively stable Rupiah currency. On the other hand, volatile foods (VF) recorded deflation of 0.09% (mtm) due to price corrections of various food commodities. 
Financial system stability was maintained along with banking system resilience. In August 2016, the Capital Adequacy Ratio (CAR) was recorded at 23.0% and the liquidity ratio (liquid assets/deposits) at a level of 21.1%. Meanwhile, non-performing loans (NPL) stood at 3.2% (gross) or 1.5% (net). The looser monetary policy stance is continuously transmitted through the interest rate channel as reflected by lower lending and deposit rates. In contrast, monetary policy transmission through the credit channel remained suboptimal, in line with limited demand, including low investment demand from corporations. Credit growth was recorded at 6.8% (yoy) in August 2016, decelerating from 7.7% (yoy) the month earlier. Meanwhile, financing through capital market, such as stock, bond, and medium term notes (MTN) issuance, increased. On the other hand, deposit growth decelerated to 5.6% (yoy). Bank Indonesia believes that the monetary and macroprudential policy easing will catalyse credit growth in order to stimulate stronger economic growth moving forward."

http://www.hedgehogs.net/pg/blog/asiablues/read/11646057/a-steep-drop-in-oil-imports-the-big-takeaway-in-eia-report-video Wed, 19 Oct 2016 21:03:45 +0100 http://www.hedgehogs.net/pg/blog/asiablues/read/11646057/a-steep-drop-in-oil-imports-the-big-takeaway-in-eia-report-video <![CDATA[A Steep Drop in Oil Imports - The Big Takeaway in EIA Report (Video)]]> By EconMatters

Gasoline was the weak part of the EIA Report today, along with what appears to be an outlier in Oil Imports, which tapered any enthusiasm for the market at the close. Do we get a big build next week as Imports hit the calendar week?

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646042/canada-keeps-rate-steady-but-cuts-growth-forecast Wed, 19 Oct 2016 15:25:04 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646042/canada-keeps-rate-steady-but-cuts-growth-forecast <![CDATA[Canada keeps rate steady but cuts growth forecast]]>     Canada's central bank left its benchmark target for the overnight rate at 0.50 percent, as widely expected, but lowered its growth forecast for this year and next year due to a slowdown in housing sales and a lower-than-expected increase in exports.
    The Bank of Canada (BOC), which cut its rate twice last year by a total of 50 basis points, said it considers the risks around its latest inflation forecast to be "roughly balanced, albeit in a context of heightened uncertainty."
    In September the BOC said that the risks to inflation had "titled somewhat to the downside" since its previous Monetary Policy Report in July.
    The BOC has often been concerned about the impact of rising home prices in parts of the country but said new housing measures should help cushion the risks to financial stability.
    The central bank lowered its forecast for Canada's Gross Domestic Product to grow by 1.1 percent this year, down from 1.3 percent forecast in July, and to 2.0 percent in 2017, down from 2.2 percent. In 2018 the country's economy is still seen expanding by 2.1 percent.
    "This projection implies that the economy returns to full capacity around mid-2018, materially later than the Bank had anticipated in July," the BOC said.

    The Bank of Canada issued the following statement:

"The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.
The global economy is expected to regain momentum in the second half of this year and through 2017 and 2018. After a weak first half, the US economy in particular is strengthening: solid consumption is being underpinned by strong employment growth and robust consumer confidence. However, because of elevated uncertainty, US business investment is on a lower track than expected.
Looking through the choppiness of recent data, the profile for growth in Canada is now lower than projected in July’s Monetary Policy Report (MPR). This is due in large part to slower near-term housing resale activity and a lower trajectory for exports. The federal government’s new measures to promote stability in Canada’s housing market are likely to restrain residential investment while dampening household vulnerabilities. Recent export data are improving but are not strong enough to make up for ground lost during the first half of 2016, despite the effects of the Canadian dollar’s past depreciation. Growth in exports over 2017 and 2018 are projected to be slower than previously forecast, due to lower estimates of global demand, a composition of US growth that appears less favourable to Canadian exports, and ongoing competitiveness challenges for Canadian firms.
After incorporating these weaker elements, Canada’s economy is still expected to grow at a rate above potential starting in the second half of 2016, supported by accommodative monetary and financial conditions and federal fiscal measures. As the economy continues to adjust to the oil price shock, investment in the energy sector appears to be bottoming out. Non-resource activity is growing solidly, particularly in the services sector. Household spending continues to rise, along with employment and incomes outside of energy-intensive regions. The Bank expects Canada’s real GDP to grow by 1.1 per cent in 2016 and about 2 per cent in both 2017 and 2018. This projection implies that the economy returns to full capacity around mid-2018, materially later than the Bank had anticipated in July.
Measures of core inflation remain close to 2 per cent as the effects of past exchange rate depreciation and excess capacity continue to offset each other. Total CPI inflation is tracking slightly below expectations because of temporary weakness in prices for gasoline, food, and telecommunications. The Bank expects total CPI inflation to be close to 2 per cent from early 2017 onwards, when these temporary factors will have dissipated, but downward pressure on inflation will continue while economic slack persists.
Given the downward revision to the growth profile and the later closing of the output gap, the Bank considers the risks around its updated inflation outlook to be roughly balanced, albeit in a context of heightened uncertainty. Meanwhile, the new housing measures should mitigate risks to the financial system over time. At present, the Bank’s Governing Council judges that the overall balance of risks is still in the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent."

http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646028/chile-maintains-rate-confirms-neutral-guidance Wed, 19 Oct 2016 00:16:13 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646028/chile-maintains-rate-confirms-neutral-guidance <![CDATA[Chile maintains rate, confirms neutral guidance]]>     Chile's central bank left its monetary policy interest rate 3.50 percent, confirming its neutral guidance that future rate changes depend on the inflationary outlook.
    The Central Bank of Chile, which has maintained its rate this year after raising it by 50 basis points in 2015, most recently in December, noted that inflation in September was "unexpectedly low" so inflation approached its 3.0 percent target sooner than expected.
     Chile's inflation rate eased further to 3.1 percent in September from 3.4 percent in August and the central bank said expectations revolve around the bank's target. The central bank targets inflation of 3.0 percent within a 2 - 4 percent range.
     In August the central bank dropped its tightening bias that it had maintained since December as inflation continued to decline, with inflation in August falling below the central bank's upper limit for the first time since November 2015.

    The Central Bank of Chile issued the following statement:

"In its monthly monetary policy meeting, the Board of the Central Bank of Chile decided to keep the monetary policy interest rate at 3.5%.
Internationally, monetary and financial conditions are still favorable and long-term interest rates remain low. On the activity side, incoming data brought no big news, pointing to a gradual recovery of world growth next year. Despite fluctuations, the prices of commodities rose during the month, especially oil.

On the domestic front, September’s CPI was unexpectedly low, making annual inflation approach 3% sooner than expected. Various expectations indicators place inflation around the target in the projection horizon. Partial third-quarter data continue to point at limited growth in output and demand, consistent with the Monetary Policy Report’s baseline scenario. The labor market continues to adjust gradually.
The Board reiterates its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the policy horizon. Any future changes in the monetary policy rate will depend on the implications of domestic and external macroeconomic conditions on the inflationary outlook."


http://www.hedgehogs.net/pg/blog/asiablues/read/11646021/somebody-had-the-api-oil-report-ahead-of-the-scheduled-release-video Tue, 18 Oct 2016 22:53:48 +0100 http://www.hedgehogs.net/pg/blog/asiablues/read/11646021/somebody-had-the-api-oil-report-ahead-of-the-scheduled-release-video <![CDATA[Somebody Had the API Oil Report Ahead of The Scheduled Release (Video)]]> By EconMatters

We go over the price action in the oil and related product`s markets after the close to illustrate that somebody had the API Report ahead of time. API needs to clean these obvious Report leaks up!

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646011/global-lending-to-emerging-markets-rises-in-q2-bis Tue, 18 Oct 2016 19:15:00 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646011/global-lending-to-emerging-markets-rises-in-q2-bis <![CDATA[Global lending to emerging markets rises in Q2 - BIS]]>     Cross-border lending to emerging market economies rose for the first time in a year during the second quarter of 2016 against a backdrop of overall stagnant international banking activity,  according to the Bank for International Settlements (BIS).
    International bank lending data from the end of June showed that cross-border claims on borrowers from emerging markets rose by $110 billion to an outstanding stock of $3.3 trillion, partially offsetting a $379 billion decline seen in the previous three quarters.
   A $61 billion increase in second quarter lending to China dominated a $70 billion rise in lending to emerging Asia but total claims on China were still down 24 percent year-on-year while claims on emerging markets in Asia were down 15 percent.
    Cross-border lending to Latin America and the Caribbean also grew in the second quarter, up by $11 billion, with claims on  Mexico and Brazil growing by $6 billion and $4 billion, respectively. BIS said Spanish banks accounted for a substantial share of lending to Brazil.
    Lending to Africa and the Middle East also rose in the second quarter - up by $33 billion - pushing the annual growth growth to 12 percent to a record $573 billion in outstanding claims. Most of the loans went to the United Arab Emirates (a rise of $17 billion), Saudi Arabia (up by $9 billion) and Qatar, up by $4 billion.
    But overall data for global cross-border credit showed that outstanding claims at the end of June were largely unchanged from June last year at $27.4 trillion, with claims on lenders from advanced economies of $19.7 trillion
    Although global cross-border claims were up by $464 billion in the second quarter, intragroup banking activity accounted for most of this increase so BIS said that on a consolidated basis, claims were virtually unchanged.

    Click to read BIS international banking statistics at end-June 2016.



http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646003/uganda-cuts-rate-another-100-bps-to-support-growth Tue, 18 Oct 2016 14:15:00 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11646003/uganda-cuts-rate-another-100-bps-to-support-growth <![CDATA[Uganda cuts rate another 100 bps to support growth]]>      Uganda's central bank cut its benchmark Central Bank Rate (CBR) by 100 basis points to 13.0 percent, saying there is scope to ease its monetary policy stance "to support the domestic economic growth momentum, especially against the ongoing global economic slowdown" as core inflation is forecast to remain around the medium term target in the next 12 months.
     The Bank of Uganda (BOU) has now cut its key rate by 400 basis points this year. The BOU also lowered its rediscount rate and bank rate to 17 percent and 18 percent, respectively, as the band around the CBR was maintained at plus/minus 3 percentage points and the margin on the rediscount rate at 4 percentage points.
     Uganda's core inflation rate dropped to 4.1 percent in September from 4.9 percent in August while headline inflation eased to 4.2 percent from 4.8 percent, with the central bank saying its forecast for 2016 and 2017 remains unchanged from August despite a slightly higher forecast for headline inflation due to higher-than-expected food prices.
    BOU expects core inflation to remain around its midpoint target of 5.0 percent in the current 2016/17 financial year, which began July 1, with the exchange rate and the impact of less-than-normal rains on harvests and food prices the main uncertainties.
    Inflation is currently held back by weak consumer demand, decreasing inflation expectations and a relatively stable exchange rate of the shilling on the back of moderately tight monetary policy in the past year. However, drought in many parts of Uganda has pushed up food prices, with annual food crop inflation up to 5.1 percent in the last three months from minus 1.9 percent, the BOU said.
    After depreciating in 2014 and 2015, the shilling has been stable since March this year and was trading at 3,465.1 to the U.S. dollar today, down 2.7 percent this year.
    Uganda's economy grew by 3.9 percent in the second calendar quarter of this year from the same period last year and by 4.8 percent in the 2015/16 financial year, up from an earlier BOU estimate of 4.6 percent.
    Recent data point indicate that a "significant pick-up in economic activity" in the fourth quarter of the fourth quarter of 2015/16 had carried over to the first quarter of the current fiscal year,  BOU said.
    The BOU said its overall economic outlook remained largely unchanged but lowered its forecast for economic growth in 2016/17 to 5.0 percent from its August forecast of 5.5 percent.
    For financial year 2017/18 BOU forecast growth of between 5.0 percent and 5.5 percent.