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Market Moving News
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| Intra-day Market Moving News |
| 19 Nov 2024 |
11:57 |
GBP/USD - 1.2634... LSEG news, Bank of England's Bailey says :
- sensible that UK fiscal rules have been amended to create more headroom for investment
- I don't know when ONS will fix problems with UK labour survey, they have a lot of work to do
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| 19 Nov 2024 |
11:56 |
GBP/USD - 1.2636... LSEG reported the Bank of England will keep Bank Rate on hold in December as global inflation worries resurface, according to a Reuters poll of economists who were split on the impact U.S. President-elect Donald Trump's proposed tariffs would have on the UK economy.
Trump's proposed tariffs, a 10% levy on imports from all foreign countries and 60% on imports from China, was expected to slow global growth and reignite inflationary pressures, limiting room for most central banks to ease policy.
Nearly 90% of economists, or 22 of 25, who answered an additional question in the Nov. 13-19 poll said the proposed tariffs would be implemented early next year.
However, they were split on the impact it would have on the UK economy over the next two to three years. While 11 of 21 said it would be insignificant, the rest said significant.
Those findings contrasted with a Reuters survey on the euro zone economy, where a majority of economists, 34 of 39, said Trump's proposed tariffs would have a significant impact.
"A universal U.S. tariff could significantly impact the global economy...although the UK has a goods trade deficit with the U.S. and may not face the most severe tariffs," said Stefan Koopman, senior market economist at Rabobank.
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| 19 Nov 2024 |
10:25 |
GBP/USD - 1.2647... LSEG news, Bank of England MPC's Mann says :
- forward-looking price and wage indicators have been flat and above target for 4 months, raise risk of inflation persistence
- financial markets' inflation expectations suggest BOE will not get to sustainable 2% inflation in forecast horizon
- latest budget offers opportunity for firms to realize price increases that are inconsistent with 2% inflation target
- even before budget, higher minimum wage was causing firms problems in maintaining wage differentials
- I do not use gradual language on rate cuts
- I prefer activist strategy on monetary policy
- important to keep rates on hold, not pursue gradualist strategy of rate cuts
- current stance of monetary policy is not particularly restrictive
- gradualism causes inflation persistence to drag on for longer
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| 19 Nov 2024 |
10:22 |
GBP/USD - 1.2640... LSEG news, Bank of England MPC's Taylor says :
- disinflation is unfolding as we would expect
- QE is a tool that needs to be there for a crisis
- QT is moving the BOE in a healthy direction compared to the past
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| 19 Nov 2024 |
10:21 |
GBP/USD - 1.2638... LSEG news, Bank of England Deputy Governor Lombardelli says :
- we have seen a fall in services inflation and wage settlements
- I see risks to inflation on both sides
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| 19 Nov 2024 |
10:20 |
GBP/USD - 1.2637... LSEG news, Bank of England's Bailey says :
- services inflation is still above a level that's compatible with on-target inflation
- we need to watch services inflation very carefully, reflects labour market developments
- tiering reserves is not necessary for BOE objectives, would be somewhat inconsistent with monetary policy
- tiering would be a tax on UK banking system
- tiering of BOE reserves would be a fiscal decision, not a monetary policy or financial stability one
- there is no big work programme going ton the tier remuneration of reserves
- tiering reserves is a decision for government, not us, it is contrary to our objectives
- if BOE paid different rates on bank reserves, that could hinder transmission of monetary policy
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| 19 Nov 2024 |
10:17 |
Continues from previous update...
Having managed to steer the euro zone's economy through uncharted waters, the ECB should change its "meeting by meeting" approach to monetary policy dictated by the exceptional circumstances of the past two years, which forced it to give less weight to forecasts, Panetta said.
"We can now return to a more traditional, genuinely forward-looking approach to monetary policy, in line with our medium-term orientation."
Panetta also urged the ECB "to provide more guidance on the expected evolution of our policy than has been the case in the recent past.
"This will help firms and households to form their views on the future path of policy rates, thereby supporting demand and the recovery of the real economy".
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| 19 Nov 2024 |
10:16 |
EUR/USD - 1.0558... LSEG then reported the European Central Bank should return to a more forward-looking approach in setting monetary policy and provide more guidance on future moves now that post-pandemic shocks are abating and inflation normalising, a top policymaker said.
ECB Governing Council member and Bank of Italy Governor Fabio Panetta said on Tuesday the euro zone economy was returning into "charted territory" after the "exceptional shocks of 2022-2023" and inflation forecasting errors were normalising.
The ECB now needs to "focus on the sluggishness of the real economy" and move official interest rates into "neutral, or even expansionary, territory," Panetta said in the text of a speech at Milan's Bocconi university.
"With inflation close to target and domestic demand stagnant, restrictive monetary conditions are no longer necessary," he said, adding inflation could fall well below target in the absence of a sustained recovery.
"A scenario that would be difficult for monetary policy to counteract and should therefore be avoided," he said.
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| 19 Nov 2024 |
10:09 |
EUR/USD - 1.0553... LSEG news, ECB's Panetta says :
- if domestic demand remains weak inflation could fall well below 2%
- ECB should move to neutral monetary stance, or even expansionary if necessary
- euro zone economic activity remains weak, no turning point in sight for beleaguered manufacturing sector
- we are probably still a long way from the neutral rate
- ECB should return to more traditional, forward looking approach to monetary policy
- the tightening bias in our official description of the monetary stance is no longer necessary
- ECB needs to give more explicit indications of its rate policy intentions
- directional guidance from the ECB would help consumption and investment
- ECB needs more forward looking communication instead of 'meeting by meeting', data-dependent approach
- forthcoming change in US government adds uncertainty to the inflation outlook
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| 18 Nov 2024 |
05:43 |
USD/JPY - 154.52.. LSEG then reported Bank of Japan Governor Kazuo Ueda said on Monday keeping inflation-adjusted real interest rates low for too long could cause excessive inflation and force the central bank into hiking interest rates rapidly.
"There's a risk underlying inflation could exceed our 2% target and keep accelerating, which would force us to raise interest rates at a faster pace than expected. That could cause problems, so we need to adjust the degree of monetary support appropriately," Ueda told a news conference, when asked about the potential demerits of keeping rates low for too long.
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| 18 Nov 2024 |
05:22 |
USD/JPY - 154.70... LSEG news, BoJ's Ueda adds :
- weak yen pushes up costs and have big negative impact on consumption, but positive for exports, inbound tourism
- keeping real interest rate low for too long could accelerate underlying inflation above 2%, force us to hike rates rapidly
- don't think there is huge build-up of yen carry positions either way, compared with situation in July
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| 18 Nov 2024 |
01:32 |
USD/JPY - 154.87... LSEG reported Bank of Japan Governor Kazuo Ueda said on Monday the central bank will keep raising interest rates if economic and price developments move in line with its forecasts.
"The timing for when we'll adjust the degree of our monetary support will depend on the economic, price and financial outlook," Ueda said in a speech in the central Japan city of Nagoya, adding that the BOJ will scrutinise various risks including from overseas and market developments.
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| 15 Nov 2024 |
15:42 |
USD/MAJORS - LSEG news, in an interview with Bloomberg TV, Fed's Collins says :
- no preset path for monetary policy
- economy is in a very good place right now
- Fed policy is well positioned
- won't take a December easing off table
- data will determine what fed does in December
- not seeing evidence of new inflation pressures
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| 15 Nov 2024 |
14:03 |
USD/MAJORS - LSEG then reported it would make sense for the Federal Reserve to slow the pace of interest rate cuts if there is disagreement among policymakers over how far rates need to be lowered to put monetary policy on a neutral footing, Chicago Federal Reserve president Austan Goolsbee said on Friday, while adding he still feels rates need to fall significantly.
"As long as we keep making progress towards the 2% inflation goal over the next 12 to 18 months rates will be a lot lower than they are now," Goolsbee said in comments to CNBC. But "if there is disagreement over what's the neutral rate, it does make sense at some point to start slowing how rapidly you are getting there to figure out...are we at neutral? Are we getting close?"
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| 15 Nov 2024 |
13:48 |
USD/MAJORS - LSEG news, Fed's Goolsbee says :
- Fed has to figure out why the 10 year is rising and keep an eye on long rates
- it is possible long rates are rising because growth is expected to be higher, or because markets think the Fed might slow its own rate cuts
- still feel good about a 12 to 18 month path to a neutral interest rate
- do not think rates will go back to where they were before the pandemic
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