<![CDATA[Hedgehogs.net: Ken Yeadon's connections' blogs]]> http://www.hedgehogs.net/pg/blog/keny/friends/?view=rss http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11401306/canada-maintains-rate-on-balanced-risks-to-inflation Wed, 22 Oct 2014 16:13:18 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11401306/canada-maintains-rate-on-balanced-risks-to-inflation <![CDATA[Canada maintains rate on balanced risks to inflation]]>     Canada's central bank maintained its benchmark target for the overnight rate at 1.0 percent, as widely expected, saying the "risks to its inflation projection are roughly balanced" while the risks to financial stability associated with household debt were edging higher.
    The Bank of Canada (BOC), which has maintained its policy rate since September 2010, omitted giving financial markets and investors specific guidance about its expected future policy, a move that was expected following a speech earlier this month in which Governor Stephen Poloz said forward guidance was best reserved for times of crises.
    At its last policy meeting in September, the BOC said it was neutral with respect to the next change in its policy rate, with the timing and direction depending on how new information influences its outlook. Economists expect the BOC to start raising its rates around the middle of next year.
    In today's statement, the BOC said total consumer price inflation was evolving broadly as expected, with underlying inflationary pressures muted but as the economy reaches full capacity in the second half of 2016, both core and total consumer price inflation are projected to be about 2 percent on a sustained basis.
    In its latest monetary policy report, the BOC raised its forecast for inflation marginally from July. Core inflation is forecast to average 2.1 percent in the fourth quarter of this year, up from July's projection of 1.8 percent while total CPI inflation rises to 2.2 percent, the same as forecast in July.

    In the fourth quarter of 2015, core inflation is seen averaging 1.8 percent, the same as in July, rising to 2.0 percent in the fourth quarter of 2016, unchanged from July. Total CPI inflation is forecast at 1.8 percent in the fourth quarter of 2015, down from July's 1.9 percent forecast, rising to 2.0 percent in the fourth quarter of 2016, the same as seen in July.
    In September Canada's core inflation rate was steady at 2.1 percent while headline inflation eased to 2.0 percent from 2.1 percent in August.
    Although the BOC said the outlook remains for stronger momentum in the global economy in 2015 and 2016,  it noted weakness since July and "persistent headwinds continue to buffet most economies and growth remains reliance on exceptional policy stimulus."
    But the BOC was relatively optimistic about the economic outlook, saying "confidence in the sustainability of domestic and global demand should improve and business investment should pick up. Together with a moderation in the growth of household spending, this is expected to gradually return Canada’s economy to a more balanced growth path."
    It also noted that the U.S. economy is gaining traction, particularly in sectors that are beneficial to Canada and the country's exports have begun to respond.
    Canada's economy is forecast to average close to 2.5 percent over the next year before slowing gradually to 2 percent by the end of 2016, roughly what the BOC considers to be the growth rate of potential output.
    In its latest forecast, annual growth is forecast at 2.2 percent in the fourth quarter of this year, up from July's forecast of 2.1 percent, and then pick up speed to 2.4 percent in the final quarter of 2015, the same as seen in July. In the fourth quarter of 2016 Gross Domestic Product growth is forecast at 2.2 percent, the same as forecast in July.
    In the second quarter of this year, Canada's GDP expanded by 0.8 percent from the first quarter for annual growth of 2.45 percent, up from 2.14 percent in the first quarter.

    The BOC issued the following statement:

"The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
Inflation in Canada is close to the 2 per cent target. Core inflation rose more rapidly than was expected in the Bank’s July Monetary Policy Report (MPR), mainly reflecting unexpected sector- specific factors. Total CPI inflation is evolving broadly as expected, as the pickup in core inflation was largely offset by lower energy prices. Underlying inflationary pressures are muted, given the persistent slack in the economy and the continued effects of competition in the retail sector.
Although the outlook remains for stronger momentum in the global economy in 2015 and 2016, the profile is weaker than in July and growth prospects are diverging across regions. Persistent headwinds continue to buffet most economies and growth remains reliant on exceptional policy stimulus. Against a background of ongoing geopolitical uncertainties and lower confidence, energy prices have declined and there has been a significant correction in global financial markets, resulting in lower government bond yields. Despite weakness elsewhere, the U.S. economy is gaining traction, particularly in sectors that are beneficial to Canada’s export prospects. The U.S. dollar has strengthened against other major currencies, including the Canadian dollar.
In this context, Canada’s exports have begun to respond. However, business investment remains weak. Meanwhile, the housing market and consumer spending are showing renewed vigour and auto sales have reached record highs, all fuelled by very low borrowing rates. The lower terms of trade will have a tempering effect on income.
Canada’s real GDP growth is projected to average close to 2 1/2 per cent over the next year before slowing gradually to 2 per cent by the end of 2016, roughly the estimated growth rate of potential output. As global headwinds recede, confidence in the sustainability of domestic and global demand should improve and business investment should pick up. Together with a moderation in the growth of household spending, this is expected to gradually return Canada’s economy to a more balanced growth path. As the economy reaches its full capacity in the second half of 2016, both core and total CPI inflation are projected to be about 2 per cent on a sustained basis.
Weighing all of these factors, the Bank judges that the risks to its inflation projection are roughly balanced. Meanwhile, the financial stability risks associated with household imbalances are edging higher. Overall, the balance of risks falls within the zone for which the current stance of monetary policy is appropriate and therefore the target for the overnight rate remains at 1 per cent."

    www.CentralBankNews.info



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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11401183/central-bank-news-link-list-oct-22-2014-carneys-boe-majority-holds-firm-on-heightened-euroarea-risks Wed, 22 Oct 2014 14:33:23 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11401183/central-bank-news-link-list-oct-22-2014-carneys-boe-majority-holds-firm-on-heightened-euroarea-risks <![CDATA[Central Bank News Link List - Oct 22, 2014 - Carneyâs BOE majority holds firm on heightened euro-area risks]]>
Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

          www.CentralBankNews.info


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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11401102/namibia-holds-rate-but-still-concerned-over-credit-growth Wed, 22 Oct 2014 14:03:06 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11401102/namibia-holds-rate-but-still-concerned-over-credit-growth <![CDATA[Namibia holds rate but still concerned over credit growth]]>     Namibia's central bank maintained its repo rate at 6.0 percent to "support domestic economic activities" while it monitors the impact of the two interest rate increases in June and August.
    But the Bank of Namibia, which has raised its rate by a total of 50 basis points this year, said it was still concerned over the strong growth in household credit that is largely financing the import of unproductive luxury goods, such as cars, and putting pressure on international reserves.
    The central bank said credit to the private sector increased to an average rate of 15.5 percent in the first eight months of the year from 14.2 percent in the previous eight month period, with strong growth in credit to individuals in overdrafts, loans, advances and installment credit.
    This resulted in a further widening of the trade deficit in January-August period, the bank said, adding that its international reserves remain sufficient to meet its foreign obligations.
    While the central bank did not provide any data for international reserves, it said in August that foreign exchange reserves had declined 15 percent since the start of the year to 15.9 billion Namibian dollars (NAD) in June.
    Data showed that foreign exchange had risen in April to 17.482 billion NAD from 14.595 billion in March.
    In the second quarter of this year, Namibia's trade deficit amounted to 5.649 billion NAD, down from 6.785 billion in the first quarter while the current account deficit in the same period fell to 1.685 billion NAD from 3.216 billion.

    Namibia's inflation rate eased to 5.3 percent in September from 5.4 percent in August, continuing the decline since hitting a 2014-high of 6.1 percent in June, with the decline mainly reflected in the cost of food, transport and housing, the bank said.
    Inflation is expected to average around 5.5 percent for 2014, the bank said, down from its August estimate of 6.0 percent.
     Namibia's economy has benefited from exports of diamonds, beef and fish and the bank said it is expected to improve this year compared with last year, supported by construction, strong domestic demand, diamond mining and manufacturing.
    But activity in agriculture, uranium and zinc production have performed poorly in the first eight months of the year, the bank added.
     The risk to growth remains low commodity prices due to depressed demand which could negatively affect export earnings, mining profits and employment.
   On Sept. 30, the central bank forecast in its quarterly report that the economy would expand 5.4 percent this year, up from an estimated 5.1 percent growth in 2013.
   




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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399493/central-bank-news-link-list-oct-21-2014-euro-drops-on-speculation-ecb-may-expand-stimulus Tue, 21 Oct 2014 21:33:53 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399493/central-bank-news-link-list-oct-21-2014-euro-drops-on-speculation-ecb-may-expand-stimulus <![CDATA[Central Bank News Link List - Oct 21, 2014 - Euro drops on speculation ECB may expand stimulus]]>
Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.


          www.CentralBankNews.info

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399350/central-bank-news-link-list-oct-20-2014-market-action-reinforces-need-for-policy-patience-feds-rosengren Mon, 20 Oct 2014 15:43:16 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399350/central-bank-news-link-list-oct-20-2014-market-action-reinforces-need-for-policy-patience-feds-rosengren <![CDATA[Central Bank News Link List - Oct 20, 2014 - Market action reinforces need for policy patience: Fedâs Rosengren]]>
Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.



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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399340/this-week-in-monetary-policy-namibia-canada-philippines-turkey-and-norway Mon, 20 Oct 2014 13:43:12 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399340/this-week-in-monetary-policy-namibia-canada-philippines-turkey-and-norway <![CDATA[This week in monetary policy: Namibia, Canada, Philippines, Turkey and Norway]]>    This week (October 20 through October 24) five central banks are scheduled to decide on monetary policy: Namibia, Canada, the Philippines, Turkey and Norway.
    Following table includes name of the country, its MSCI classification, the date the policy decision will be announced, the current policy rate, and the rate one year ago.


COUNTRY MSCI              DATE  CURRENT  RATE         1 YEAR AGO
NAMIBIA 21-Oct 6.00% 5.50%
CANADA DM 22-Oct 1.00% 1.00%
PHILIPPINES EM 23-Oct 4.00% 3.50%
TURKEY EM 23-Oct 8.25% 4.50%
NORWAY DM 23-Oct 1.50% 1.50%

     www.CentralBankNews.info


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http://www.hedgehogs.net/pg/blog/mikeohara/read/11399330/commission-unbundling-what-does-it-mean-for-the-industry Mon, 20 Oct 2014 09:04:07 +0100 http://www.hedgehogs.net/pg/blog/mikeohara/read/11399330/commission-unbundling-what-does-it-mean-for-the-industry <![CDATA[Commission Unbundling - What Does it Mean for the Industry?]]>

read more...

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399321/monetary-policy-week-in-review-oct-1317-2014-era-of-ultraeasy-monetary-policy-in-us-uk-may-be-extended Sun, 19 Oct 2014 23:13:14 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399321/monetary-policy-week-in-review-oct-1317-2014-era-of-ultraeasy-monetary-policy-in-us-uk-may-be-extended <![CDATA[Monetary Policy Week in Review â Oct 13-17, 2014: Era of ultra-easy monetary policy in US, UK may be extended]]>     The era of ultra-easy monetary policy in the U.S. and U.K. may continue for longer than expected as central bankers on both sides of the Atlantic last week signaled to financial markets that Europe’s worsening growth prospects could lead to a delay in any tightening.
    The first sign of a possible shift in U.S. monetary policy came on Oct. 11 when Fed Vice Chairman Stanley Fischer said weaker-than-expected foreign growth could lead to the Fed to remove accommodation more slowly than otherwise.
    Fischer's comments were followed on Oct. 16 by James Bullard, president of the St. Louis Fed, who said the Fed may delay ending its asset purchases as planned later this month in response to declining inflation expectation in the U.S.
    The reaction of financial markets to the comments by Bullard – who won't be voting on monetary policy until 2016 -  were immediate, the latest reminder of just how addicted highly charged financial markets have become to central bank liquidity.
     Talk of a “Yellen put” quickly resurfaced in media with Fischer and Bullard's remarks seen reflecting a more general view among members of the Federal Open Market Committee (FOMC).
    A "Yellen put" is a reference to the belief that the Fed under its new chair will continue the policy known as the “Greenspan Put” and the “Bernanke Put” and ultimately intervene to put a floor under prices if markets suddenly go into freefall.
    The next day, Oct. 17, it was the Bank of England’s (BOE) turn to reassure financial markets that it too was sensitive to  â€œgloomier” global growth prospects, as its chief economist, Andrew Haldane, said in a speech and to the ITV television network.
    Haldane said the downturn in global growth prospects and lack of inflationary pressures meant that he was now less likely to vote for a rate increase than three months ago and the BOE could wait longer before raising rates.
    As in the U.S., financial markets immediately pushed back the time frame for when they expect the BOE to raise its rates for the first time July 2007.
     U.K. rates are now broadly expected to be raised in September 2015 rather than May while the first hike in U.S. rates is now seen by markets in the fourth quarter of 2015 rather than around the middle of the year.
    In Europe, the focal point of financial markets’ worry over slowing global growth, there were signs that politicians finally grasp the urgent need to help the European Central Bank (ECB) in reviving stalling economic growth.
    German Finance Minister Wolfgang Schaeuble told the Welt am Sonntag newspaper that investments to improve competitiveness had to be increased quickly, echoing the International Monetary Fund’s appeal for advanced economies to boost potential growth, partly by investments in ageing infrastructure.
    But Schaeuble also showed why it is so agonizingly difficult for the euro area to overcome “eurosclerosis” – a term created in the late 1970s to describe the excruciatingly slow pace of economic and political integration along with the sluggish pace of economic growth.
    Schaeuble said any investments to improve Germany’s energy grid, roads or railways will not change the government’s promise to balance its budget next year for the first time since 1969, a commitment that severely limits its ability to stimulate demand.
   
    The message from those central banks that deliberated policy last week echoed the concerns of the Fed and BOE, with inflation generally declining along with growing downside risks from the global economy.
    As in recent months, central banks worldwide are closely following the possibility of increased volatility in global financial conditions from the shift in U.S. monetary policy, a factor that was particularly noted by the Bank of Korea, the Bank of Uganda, the National Bank of Serbia, the Central Bank of Egypt, the Bank of Chile and the Bank of Mozambique.
    Last week also witnessed expected rate cuts by the central banks of Korea and Chile in response to weak economic activity.
   
   Through the first 42 weeks of this year, the 90 central banks followed by Central Bank News have cut their policy rates 53 times, or 13.8 percent of all policy decisions, up from 12 percent at the end of the first half and 12 percent at the end of the first quarter.
    Central banks in advanced economies have accounted for six of the rate reductions, with Israel cutting its rate three times, the European Central Bank twice and Sweden once.
    Following last week’s rate cuts by Chile and South Korea, emerging market central banks have cut rates 24 times, just under half of all the rate cuts worldwide as the slowdown in Europe and China takes a bite out of their exports.
    Meanwhile, rates have been raised 38 times, or 9.9 percent of all policy decisions, up from 9.3 percent at the end of June and 8.7 percent at the end of March.
    Among advanced economies, only New Zealand has raised its rate four times while emerging market central banks have raised rates 18 times, frontier market central banks three times and other central banks 12 times.

LIST OF LAST WEEK’S CENTRAL BANK DECISIONS: 

TABLE WITH LAST WEEK’S MONETARY POLICY DECISIONS:

COUNTRY MSCI      NEW RATE            OLD RATE         1 YEAR AGO
UGANDA 11.00% 11.00% 12.00%
SINGAPORE DM                  N/A                  N/A                  N/A
SOUTH KOREA EM 2.00% 2.25% 2.50%
SERBIA FM 8.50% 8.50% 10.50%
EGYPT EM 9.25% 9.25% 8.75%
CHILE EM 3.00% 3.25% 4.75%
SRI LANKA FM 6.50% 6.50% 6.50%
MOZAMBIQUE 8.25% 8.25% 8.25%

  THIS WEEK (Week 43) five central banks or monetary authorities are scheduled to decide on monetary policy: Namibia, Canada, the Philippines, Turkey and Norway.

TABLE WITH THIS WEEK’S MONETARY POLICY DECISIONS:

COUNTRY MSCI              DATE  CURRENT  RATE         1 YEAR AGO
NAMIBIA 21-Oct 6.00% 5.50%
CANADA DM 22-Oct 1.00% 1.00%
PHILIPPINES EM 23-Oct 4.00% 3.50%
TURKEY EM 23-Oct 8.25% 4.50%
NORWAY DM 23-Oct 1.50% 1.50%




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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399316/central-bank-news-link-list-oct-19-2014-markets-may-have-overreacted-to-slowdown-boes-haldane Sun, 19 Oct 2014 18:53:10 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399316/central-bank-news-link-list-oct-19-2014-markets-may-have-overreacted-to-slowdown-boes-haldane <![CDATA[Central Bank News Link List - Oct 19, 2014 - Markets may have over-reacted to slowdown: BoEâs Haldane]]>
Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.



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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399296/mozambique-holds-rate-confident-will-hit-inflation-aim Sat, 18 Oct 2014 00:43:10 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11399296/mozambique-holds-rate-confident-will-hit-inflation-aim <![CDATA[Mozambique holds rate, confident will hit inflation aim]]>    Mozambique's central bank maintained its benchmark standing facility rate at 8.25 percent and said it was "confident" that its inflation target of 6.0 percent for the end of 2014 will be met in light of the favorable behavior of inflation in September and the short and medium-term outlook.
    But the Bank of Mozambique, which has kept its rate steady since October 2013, also said it had noted the risk of a slowing global economic activity,  the volatility in international commodity prices and the resulting impact on its balance of payments.
    During October the central bank will also intervene in interbank markets to ensure that the monetary base hits the goal of 53.786 billion meticais, up from 52.846 billion in September.
    Mozambique's inflation rate eased to 2.23 percent in September from 2.64 percent in August, with the decline in inflation in the last five months due to the greater availability of fruits, vegetables and the stability of the metical's exchange rate that is sustained by adequate foreign exchange reserves.
    At its last meeting on Sept. 15, the central bank said the prospects for inflation to meet its 6.0 percent target was improving.
    Mozambique's Net International Reserves eased by US$ 158.3 to $3.0925 billion at the end of September, the equivalent of 4.3 months of import cover.
    Preliminary data showed that Mozambique's economy expanded by an annual 6.9 percent in the second quarter, the bank said, compared with an annual rate of 7.5 percent in the first quarter
   


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