Central Banks
US dollar drops as the economy shrinks by 0.9% for the last quarter.
US economic data revealed last night shows that the country’s GDP has shrunk by 0.9%, although some are remaining positive that a recession may still be avoided. Despite the worrying figures, Federal Reserve Chair, Jerome Powell, outlined his belief that due to low unemployment figures of 3.6% and a strong market for jobs with 11 million job open...
Australian CPI figures increase to 6.1%
The Australian Consumer data was released today with Consumer Price Index rising to 6.1% over the past 12 months. For the quarter, the CPI rose by 1.8% which was 0.1% lower then what analysts expected the figure to be. This was also lower then the 2.1% jump seen in the previous March quarter. The most significant contributors to the increase were n...
Reserve Bank of Australia releases its minutes from the July meeting
The Australian dollar has begun the week relatively strongly after gaining some momentum from RBA's most recent meeting. The board pushed across quite a hawkish sentiment sparking the rise in the AUD. They found that the current slowing growth across the market and global sphere created that was “becoming skewed to the downside.” The board e...
AUD/USD’s reaction to the yesterday’s RBA interest decision
The AUDUSD pair has reached an intraday peak of 0.72469 following the RBA decision. The buying action was spurred on by Aussie bullish investors after the RBA decided to increase the interest rate by 50 basis points to 0.85%. This increase was higher than the consensus of 25 basis points. The RBA is on track to raise the interest rate a few ...
Powell indicates higher interest rates to come as Oil jumps again
US indices were down today as Jerome Powell indicated that the Federal Reserve is going to increase interest rates at a higher and faster rate than currently in place. US equities dropped after Powell’s speech. Ultimately the major indices ended relatively flat by the close of trading. The Nasdaq closed down 0.40% after taking a breather from its...
Markets continue to consolidate after the Federal Reserve increased interest rates
US markets continued their gains overnight as the market continued to rally on the back of the prior day’s Federal Reserve news. The Nasdaq finished up 1.33%. The Dow Jones Index closed 1.23% higher and the S&P 500 ended the session 1.23% higher as well. In Europe, the FTSE performed well finishing up and 1.28%, and the DAX closed at 0.36% lo...
US indices have a bumper session on the back of positive direction given from the Federal Reserve
US indices had a bumper day of trading as the Federal Reserve increased interest rates by 25 basis points. The Reserve is also expected to raise rates to between 1.75% and 2.00% by the end of the year, with 7 increases expected till the end of 2022. The Federal Reserve made it clear that they are doing their utmost to fight inflation. Jerome Powell...
The Federal Bank and how it affects us
All major countries’ economies have one thing in common; they are all subject to a central bank. Here in Australia is no different, we have the RBA Reserve Bank of Australia. Their roles are largely the same everywhere: a key role of central banks is to conduct monetary policy to achieve price stability (low and stable inflation) and to he...
Preview: the Bank of Canada rate decision
One of the must-watch economic events this week will be the Bank of Canada interest rate decision. The rate decision is due to be announced at 15:00 PM London time on Wednesday. Why is the announcement important? A bank interest rate is a rate at which a country's central bank lends money to local banks. The interest rate is charged by the nat...
Interest Rates: Ultra Low, Near Zero or Negative?
In a pandemic-induced environment, central banks and governments have absorbed all the shocks of the virus on the financial markets by injecting massive liquidity in the economy, keeping credit flowing and supporting the global economy with huge fiscal stimulus plans to manage an unparalleled health and economic crisis. Governments and Central ...
A Cautious Fed
A Cautious Fed FOMC Meeting Investors were eagerly looking forward to the Fed’s statement and forecasts for clues on how the Fed is viewing the health of the economy after easing lockdown measures. Global central banks have played a crucial part in absorbing the pandemic-induced shocks in the global economy. Together with huge fiscal interve...
Eyes on the Fed and the Dot Plots
Global central banks have been a crucial part in providing aid and support to the global economy during the coronavirus pandemic. Faced with an unprecedented crisis, central bankers have rapidly deployed various monetary tools to keep credit flowing and support businesses and households. Given that interest rates were somewhat already at record...
2019 in a Nutshell and the Transition to a New Decade
If we could describe the year 2019 in one word, we believe uncertainty says it all. The world entered 2019 with a high level of ambiguity and is poised to finish the year with the same extent of uncertainties. The Global Economic Policy Uncertainty Index which is a GDP-weighted average of national EPU indices for 20 countries has remained in ele...
Fed in Focus – US Repo and Funds Rate
Fed in Focus - US Repo and Funds Rate During the week, it was all about the Repo market. A Repurchase Agreement known as Repo is a form of short-term borrowing for dealers in government securities. The Repo market plays a key role in supporting liquidity in the financial markets. It facilitates the flow of cash and securities around the financi...
ECB: Draghi’s Last Call for A Significant Degree of Monetary Stimulus
Central banks of major economies like the US, UK and Japan turned to quantitative easing (QE) at a time where they were unable to push interest rates any lower. The European Central Bank (ECB) launched its first large scale of asset purchases in 2015 and was among the latest central bank to join the QE bandwagon. How QE works The ECB adopted the...
