Ian Dobbs

Fed Dominates Markets

Market Overview

World Central Banks, what’s been going on…

Federal Reserve
Cash Rate 0.10%
Inflation target 2.0%, currently this is 4.99% y/y  (highest read since 2008) The Fed believe recent inflation rises are “transitory”.
Interest Rate rises are not predicted to start rising until 2023- 2024 at the earliest.
Bond buying program: USD 120 billion per month- the Fed however has finally said yesterday they will start talking pulling back on asset buying, this will depend entirely on progress and not calendar dependant.
“Economic Impact Payments” have been made over the past few months totalling approximately USD 391 billion.
Federal Reserve officials indicated they expect higher interest rates by late 2023, sooner than previously projected, lifting the benchmark rate by 0.6% by the end of 2023. Read more

World Central Banks…

FX Update: 

World Central Banks, what’s been going on…

Federal Reserve

Cash Rate 0.10%

Inflation target 2.0%, currently this is 4.99% y/y (highest read since 2008) The Fed believe recent inflation rises are “transitory”

Interest Rate rises are not predicted to start rising until 2023- 2024 at the earliest. 

Bond buying program: USD 120 billion per month- the Fed however has finally said yesterday they will start talking pulling back on asset buying, this will depend entirely on progress and not calendar dependant. 

“Economic Impact Payments” have been made over the past few months totalling approximately USD 391 billion.  

Federal Reserve officials indicated they expect higher interest rates by late 2023, sooner than previously projected, lifting the benchmark rate by 0.6% by the end of 2023. Read more

FX Update for 2021-06-15: Will the Fed react to rising inflation?

Market Overview

• Worldwide coronavirus cases surpass 177.020 million with over 3.827 million official deaths
• The IOC won’t be cancelling the Olympic Games to be held in Japan late July after calls to cancel it by top ranking Japanese officials.  Japan has sunk at least 35B into staging the games which will make it the most expensive ever. The IOC’s integrity is on the line.
• The Federal Reserve still believe that inflation rises are transitory after CPI y/y rose from 4.2% to 4.99% – we should get an update from the Federal Reserve this week on future forecasts
• UK prime minister Johnson extends UK coronavirus restrictions to the 19th July 2021 after a fresh flood of the new delta variant
• The Nasdaq and S&P indices close at record highs
• Crude Oil extends higher to 3 year highs at 71.22 per barrel
• NZ House Price rise 1.5% m/m in May making this 24.7% y/y

Read more

Ian Dobbs

Economic Releases: 2021-06-14

Monday 14/06
All Day, AUD, Bank Holiday
All Day, CN, Bank Holiday

Wednesday 15/06
12:15am, GBP, BOE Gov Bailey Speaks
12:30am, USD, Core Retail Sales m/m
Forecast 0.40%
Previous -0.80%
12:30am, USD, PPI m/m
Forecast 0.50%
Previous 0.60%
12:30am, USD, Retail Sales m/m
Forecast -0.60%
Previous 0.00% Read more

FX Update for 2021-06-09: US employment Data Weakens Big Dollar

Market Overview

• Worldwide coronavirus cases surpass 174.738 million with over 3.762 million official
deaths.
• Japan’s senior medical advisor has warned Japanese officials against staging the Olympic Games on the 23rd of July based on the strain it could put on healthcare workers.
• The Federal Reserve still believe that inflation rises are transitory/temporary and that price rises will return to normal ahead.
• NZ Business Survey for June confidence came in at -0.4% on 1.8% prior but businesses generally remain economic supportive.
• US President Biden meets with UK Prime Minister Johnson tomorrow to discuss the G7 global minimum tax rate.
• The heavy traffic ANZ “Truckometer” Index for May was down -4.8% against -1.2% m/m showing the NZ economy is under reasonable pressures facing supply issues and logistics. Read more

Economic Releases: 2021-06-08

Tuesday 08/06
9PM, EUR, ZEW Economic Sentiment
Forecast 85.5
Previous 84
9PM, EUR, German ZEW Sentiment
Forecast 86
Previous 84.4

Wednesday 09/06
1PM, NZD, Prelim ANZ Business Confidence
Previous 1.8
1:30PM, CNY, CPI y/y
Forecast 1.60%
Previous 0.90%
4PM, AUD, RBA Assist Gov Kent Speaks Read more

Weekly Key Points: 2021-06-04

Key Points:

  • Worldwide coronavirus cases surpass 172.886 million with over 3.716 million official deaths.
  • Japan’s senior medical advisor has warned Japanese officials against staging the Olympic Games on the 23rd of July based on the strain it could put on healthcare workers.
  • Goldman Sachs are predicting 750,000 print for tonight’s NFP release much higher than the 645,000 analysts are forecasting. 
  • President Biden’s administration is considering opening its proposal to raise corporate tax to 28% 
  • New Melbourne community spread coronavirus infections are expected to draw out Thursday’s lockdown reopening which will have economic impacts as there is no current federal government wage support program.
  • The Australian economy grew by 1.8% in the March quarter reflecting recent easing of coronavirus restrictions and a labour market recovery. 

RBA mood to set AUD direction

Market Overview

• Worldwide coronavirus cases surpass 171.451 million with over 3.564 million official
deaths.
• Japan coronavirus numbers continue to rise with restriction measures to continue to within 5 weeks of the Olympic Games.
• Iron Ore prices have soured as China ease emission controls which will boost Australian exports.
• Malaysia will go into a nationwide lockdown on the 1st of June closing down most industries including car manufacturers Toyota and Honda until the 14th of June.
• No fireworks are predicted today in the RBA policy statement but risks are tilted to a “hawkish” shift.
• New Melbourne community spread coronavirus infections are expected to draw out Thursday’s lockdown reopening which will have economic impacts as there is no current federal government wage support program. Read more

Economic Releases: 2021-05-31

Monday 31/05
All Day, GBP, Bank Holiday

Tuesday 01/06
All Day, USD, Bank Holiday
4:30PM, AUD, RBA Rate Statement
All Day, All, OPEC-JMMC Meetings

Wednesday 02/06
2:00AM, USD, ISM Manufacturing PMI
Forecast 61.2
Previous 60.7
3:00AM, GBP, BOE Gov Bailey Speaks
1:30PM, AUD, GDP q/q
Forecast 1.10%
Previous 3.10%
All Day, EUR, Italian Bank Holiday

Read more