China’s central bank vows more steps to support virus-hit economy

China’s central bank will take further steps to support the virus-hit economy, including releasing more liquidity and lowering funding costs for firms, a vice governor of the bank told state media. We are confident and able to offset the impact of the epidemic,” Liu told the newspaper. Liu reiterated that the central bank will not resort to “flood-like” stimulus. “We believe that after this epidemic is over, pent-up demand for consumption and investment will be fully released, and China’s econom


China’s central bank will take further steps to support the virus-hit economy, including releasing more liquidity and lowering funding costs for firms, a vice governor of the bank told state media.
We are confident and able to offset the impact of the epidemic,” Liu told the newspaper.
Liu reiterated that the central bank will not resort to “flood-like” stimulus.
“We believe that after this epidemic is over, pent-up demand for consumption and investment will be fully released, and China’s econom
China’s central bank vows more steps to support virus-hit economy Cached Page below :
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Keywords: news, cnbc, companies, bank, rates, vows, support, chinas, liu, epidemic, virushit, told, central, steps, impact, economy


China's central bank vows more steps to support virus-hit economy

A woman walks past the headquarters of the People’s Bank of China in Beijing, China.

China’s central bank will take further steps to support the virus-hit economy, including releasing more liquidity and lowering funding costs for firms, a vice governor of the bank told state media.

The People’s Bank of China (PBOC) will guide market interest rates lower and keep liquidity appropriately ample to help companies affected by the coronavirus epidemic, Liu Guoqiang, the bank official, told the Financial News in an interview.

The PBOC will release more liquidity to banks by adjusting the criteria for targeted reserve requirement ratios (RRR) cuts, Liu said.

“China’s monetary policy space is still very sufficient, and the toolbox is also sufficient. We are confident and able to offset the impact of the epidemic,” Liu told the newspaper.

The central bank will push down real lending rates, especially for small firms, by further improving the transmission mechanism of the loan prime rate (LPR) – its new benchmark lending rate, Liu said.

Liu reiterated that the central bank will not resort to “flood-like” stimulus.

China has cut several of its key rates in recent weeks, including the benchmark lending rate on Thursday, in a bid to reduce financial strains on companies facing severe business disruptions due to the outbreak. Investors widely expect further monetary and fiscal support measures in coming weeks.

Benchmark deposit rates will also be adjusted at an appropriate time, Liu said.

Liu said that the epidemic’s impact on China’s economy would be limited, and that Beijing would strive to meet economic and social development targets this year.

Chen Yulu, another vice central bank governor, said that the coronavirus’ impact on China’s economy will be short-term and limited, and that the country is fully confident it beat the epidemic, state media reported on Saturday.

“We believe that after this epidemic is over, pent-up demand for consumption and investment will be fully released, and China’s economy will rebound swiftly,” Chen said.

China’s economic growth may show a sharp slowdown in the first quarter, probably dipping to 3% or even lower from 6% in the previous quarter — which was the weakest pace in nearly 30 years, economists estimated.

The central bank also is closely monitoring consumer prices, which could be disturbed by the virus epidemic, Liu said.

Seasonal factors and the virus’ impact were behind the flat M1 money supply, or cash in circulation plus corporate demand deposits, in January from a year earlier, Liu said.

Liu also said China’s economic fundamentals were sound, adding it had ample foreign currency reserves to support its yuan currency.


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Investors need to wake up and face the warning signs in the global economy

At the same time, they are overestimating the power of monetary and fiscal stimulus to keep the global economic party going. Every time the global economy approached the brink in the decade since the Great Financial Crisis of 2008-2009, some intervening force pulled us back. The latest came last year when it looked as though the global economy might slow to below 2 percent GDP growth, generally considered a way to measure the onset of a global recession. As the International Monetary Fund has po


At the same time, they are overestimating the power of monetary and fiscal stimulus to keep the global economic party going.
Every time the global economy approached the brink in the decade since the Great Financial Crisis of 2008-2009, some intervening force pulled us back.
The latest came last year when it looked as though the global economy might slow to below 2 percent GDP growth, generally considered a way to measure the onset of a global recession.
As the International Monetary Fund has po
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Company: cnbc, Activity: cnbc, Date: 2020-02-21  Authors: frederick kempe
Keywords: news, cnbc, companies, need, investors, major, rate, global, coronavirus, economy, central, fiscal, economic, monetary, warning, face, banks, signs, wake


Investors need to wake up and face the warning signs in the global economy

Monticelllo | Getty Images

Global investors are being overly complacent about downside economic risks, aggravated but not limited to the growing impact of coronavirus. They are underestimating the forces that are changing the very nature of the world economy – a growing degree of “deglobalization” in the face of U.S.-Chinese decoupling. At the same time, they are overestimating the power of monetary and fiscal stimulus to keep the global economic party going. When G-20 finance ministers meet this weekend in Riyadh, they’ll do so at a time when all of the world’s ten major economies are slowing – and several confront recession. Next week, Beijing is likely to announce a delay in the meeting of its National People’s Congress due to the coronavirus outbreak. This week, Apple raised fears of more global corporate troubles to come with a coronavirus-caused revenue warning. The full ripple effects of the virus, and of the economic impact of humans scared to be with other humans, will show up in first quarter results, in particular in tourism, travel and on all Chinese and global companies that depend on Chinese supply chains and markets. Despite all that, investor complacency persists in no small part due to a fundamental misunderstanding of how rapidly the world has changed, economically and politically. We are only in the opening pages of this new era of major power competition and technological change, and there’s no model to “price in” its impact. Within democracies, the public’s faith has been shaken in capitalism and globalization to produce results that deliver greater prosperity. Most recently, that has driven everything from the recent Irish election victory of Sinn Fein, to the UK’s departure from the European Union, to the erosion of the German political center.

Markets are wagering that the combination of fiscal and monetary measures will again prevent the worst. However, what if they’re wrong?

Most dramatic is the growing possibility that U.S. presidential elections this year could produce a showdown between two populists of different stripes but similar decibels, Donald Trump and Bernie Sanders. Both are septuagenarian insurgents who appeal to hard-core, unconventional constituencies, and that’s prompted global concern that the new U.S. normal may be abnormal. All of that is unfolding against a backdrop of a major power test that at its heart is a systemic struggle between democratic and authoritarian capitalist models. Though traditional security analysts continue to worry about how U.S.-Chinese, U.S.-Russian or U.S.-Iranian tensions could unravel into armed conflict, the more likely outcome is a resource-sapping, continual competition that stops short of kinetics but involves information warfare, cyber assaults, and economic clashes ranging from trade wars to targeted sanctions. But let’s get back to investors and their complacency, which is as easy to explain as it is increasingly hard to justify. Every time the global economy approached the brink in the decade since the Great Financial Crisis of 2008-2009, some intervening force pulled us back. The latest came last year when it looked as though the global economy might slow to below 2 percent GDP growth, generally considered a way to measure the onset of a global recession. Central banks stepped up. As the International Monetary Fund has pointed out, 49 central banks cut interest rates 71 times last year. The result was a 0.5 percent global GDP boost, according to the IMF. Monetary policy saved the day. Investors understand that coronavirus could be a major 2020 shock, but they are wagering again that something will prevent this from becoming an economic disaster. They realize the U.S. Fed and other central banks may have fewer monetary tools to deploy, so they are counting on increased fiscal stimulus from governments. For example, Chinese lenders on Thursday cut their one-year loan prime rate, which is used across the financial system, by 0.1 percent to 4.05 percent. The result was a rallying of Chinese stocks that day of 2.2 percent of the benchmark CSI 300 index. That followed the Chinese central bank’s cut to its medium-term lending rate this week, as well as dozens of other measures Beijing has introduced in recent days to support businesses hit by the epidemic. The Financial Times reports that China’s central bank thus far has made 300 billion RmB available to large lenders and local banks in hard-hit areas, particularly Hubei province.

Wishful thinking

Even so, the S&P Global Ratings forecast that China’s 2020 growth could fall to 4.4 percent from its 6 percent level last year, if the coronavirus hit continues through April. Most predictions of that sort probably err on the optimistic side, and it may be wishful thinking that China’s economy will make up most of what is being lost once coronavirus recedes. At the same time, the eurozone economy barely grew in the fourth quarter of 2019, up only 0.1 percent from the previous quarter, the slowest rate since 2013. Germany had zero growth. Real GDP in the eurozone was up just 0.9 percent in 2019, the slowest rate since 2013. (With the UK now leaving the EU, its leaders failed to agree on their budget on Friday due to insoluble differences.) Governments across the world see these storm clouds, and a Bloomberg survey of economic forecasts shows that budgets are loosening in more than half of the world’s 20 biggest economies, providing some of the fiscal stimulus that central bankers have been seeking from their government counterparts. Markets are wagering that the combination of fiscal and monetary measures will again prevent the worst. However, what if they’re wrong? Other than the United States, major central banks are tapped out, some of them experimenting with negative interest rates. Some experts argue that our low interest rate environment allows greater borrowing for fiscal stimulus. That’s risky business.

Near the end


Company: cnbc, Activity: cnbc, Date: 2020-02-21  Authors: frederick kempe
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China’s central bank cuts rate for medium-term loans to support virus-hit economy

Pedestrians walk past the People’s Bank of China headquarters in Beijing, China, on January 7, 2019. China’s central bank cut the interest rate on its medium term loans on Monday as policymakers try to reduce the economic shock from a coronavirus outbreak that is severely disrupting business activity. The People’s Bank of China (PBOC) said it was lowering the rate on 200 billion yuan ($28.65 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions by 10 basis


Pedestrians walk past the People’s Bank of China headquarters in Beijing, China, on January 7, 2019.
China’s central bank cut the interest rate on its medium term loans on Monday as policymakers try to reduce the economic shock from a coronavirus outbreak that is severely disrupting business activity.
The People’s Bank of China (PBOC) said it was lowering the rate on 200 billion yuan ($28.65 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions by 10 basis
China’s central bank cuts rate for medium-term loans to support virus-hit economy Cached Page below :
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Keywords: news, cnbc, companies, billion, pboc, loans, support, rate, chinas, repos, mediumterm, virushit, yuan, cuts, central, reverse, bank, china, economy, worth


China's central bank cuts rate for medium-term loans to support virus-hit economy

Pedestrians walk past the People’s Bank of China headquarters in Beijing, China, on January 7, 2019.

China’s central bank cut the interest rate on its medium term loans on Monday as policymakers try to reduce the economic shock from a coronavirus outbreak that is severely disrupting business activity.

The People’s Bank of China (PBOC) said it was lowering the rate on 200 billion yuan ($28.65 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions by 10 basis points (bps) to 3.15% from 3.25% previously.

No MLF loans had been set to mature on Monday.

Earlier this month, as the virus outbreak escalated, the PBOC unexpectedly lowered the interest rates on reverse repurchase agreements by 10 bps.

Monday’s move is expected to pave the way for a cut in the country’s benchmark loan prime rate (LPR), which will be announced on Thursday.

The PBOC also said in the statement that it injected 100 billion yuan of reverse repos to financial institutions on Monday, when a total of one trillion yuan worth of reverse repos are due to expire.


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Investors are flocking to bond funds in record numbers

Despite a roaring U.S. stock market, investors continue to pile money into the bond market at a record pace. Last week, in fact, set a new standard for cash flowing into fixed income funds with $23.6 billion of inflows, according to Bank of America Global Research. If that keeps up, the year will see another $1 trillion of inflows for the $10 trillion already in global bond market funds. “We’re seeing a rising tide lift all boats right now,” said Bill Merz, fixed income strategist at U.S. Bank W


Despite a roaring U.S. stock market, investors continue to pile money into the bond market at a record pace.
Last week, in fact, set a new standard for cash flowing into fixed income funds with $23.6 billion of inflows, according to Bank of America Global Research.
If that keeps up, the year will see another $1 trillion of inflows for the $10 trillion already in global bond market funds.
“We’re seeing a rising tide lift all boats right now,” said Bill Merz, fixed income strategist at U.S. Bank W
Investors are flocking to bond funds in record numbers Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-14  Authors: jeff cox
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Investors are flocking to bond funds in record numbers

Despite a roaring U.S. stock market, investors continue to pile money into the bond market at a record pace. Last week, in fact, set a new standard for cash flowing into fixed income funds with $23.6 billion of inflows, according to Bank of America Global Research. If that keeps up, the year will see another $1 trillion of inflows for the $10 trillion already in global bond market funds. By contrast, equity funds took in a net $8 billion in 2019.

BofA’s chief investment strategist Michael Hartnett said the market is seeing a “twin” bubble of assets coming into both bonds and tech stocks. However, investors are betting that a low interest rate environment coupled with slow though not spectacular economic growth will make bonds both a way to preserve capital and generate income at a time of growing volatility in the stock market. “We’re seeing a rising tide lift all boats right now,” said Bill Merz, fixed income strategist at U.S. Bank Wealth Management. “There’s a bit of a rebalance trade there. But I think the underlying catalyst is just this remarkable degree of liquidity coming from the major central banks in the last few months that have kept this going.”

Indeed, after efforts by central banks to get back into a more pre-financial crisis policy lane scared markets, the Federal Reserve and its global counterparts have turned on the monetary spigots again. By Merz’s count, central banks have added about $800 billion worth of liquidity since the September tumult in overnight lending markets, in the form of bond purchases aimed at stabilizing repo operations and, in some cases globally, to spur growth. Money has been looking for a place to go, and much of it has funneled into a bond market that has seen yields across both government and corporate debt test all-time lows.

Low rates far as the eye can see


Company: cnbc, Activity: cnbc, Date: 2020-02-14  Authors: jeff cox
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More than 10 years after the crisis, central banks are hoping the public will give them a new direction

European Central Bank President Christine Lagarde. The European Central Bank (ECB) is hosting its first “listening event” in Brussels next month. Central banks have changedThe two major central banks have undergone a massive change in the aftermath of the global financial crisis. But the global financial community is now questioning whether both central banks have reached a limit. The International Monetary Fund said in November that “concerns about the expanded activities of central banks led t


European Central Bank President Christine Lagarde.
The European Central Bank (ECB) is hosting its first “listening event” in Brussels next month.
Central banks have changedThe two major central banks have undergone a massive change in the aftermath of the global financial crisis.
But the global financial community is now questioning whether both central banks have reached a limit.
The International Monetary Fund said in November that “concerns about the expanded activities of central banks led t
More than 10 years after the crisis, central banks are hoping the public will give them a new direction Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-12  Authors: silvia amaro
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More than 10 years after the crisis, central banks are hoping the public will give them a new direction

European Central Bank President Christine Lagarde. Chip Somodevilla | Getty Images News | Getty Images

Central banks are experiencing a soul-searching moment as they look to strengthen their popularity after the global financial crisis — an exercise that could ultimately change how they operate. The European Central Bank (ECB) is hosting its first “listening event” in Brussels next month. President Christine Lagarde is set to discuss with European citizens the role of the central bank across the 19-country region. However, the ECB is not the first major central bank to organize such events. The U.S. Federal Reserve announced in late 2018 that it would be reviewing its work, which included several “Fed Listens” events across the country. The results are set to be unveiled in the first half of 2020. “The ECB is simply imitating the Fed, and both are doing the public consultations because they feel insecure as their instruments seem to have lost ‘bite,'” Daniel Gros, the director of the Brussels-based think tank CEPS, told CNBC via email.

Different analysts argue that central banks are conducting these public exercises to receive reassurances on what they do, at a time when many have doubts about the effectiveness of their policy tools. “Hoping to heal rifts between the ECB and the general public, in some countries, is certainly a big part of the exercise,” Florian Hense, an economist at Berenberg bank, told CNBC. Erik Jones, a professor at the Johns Hopkins University, said “there is a lot of talk about the need for central banks to communicate more transparently … Part of this may be the result of a sense of exposure that central bankers felt when they were ‘the only game in town’ in the depths of the crisis.”

Central banks have changed

The two major central banks have undergone a massive change in the aftermath of the global financial crisis. They were forced to expand their balance sheets and announced unconventional measures to support their respective economies. But the global financial community is now questioning whether both central banks have reached a limit. The International Monetary Fund said in November that “concerns about the expanded activities of central banks led to skepticism about the necessity or the appropriate degree of central bank independence.” At the same time, the general public seems largely unaware about the work conducted by these institutions.

It is hard to imagine that nothing will change at all. Erik Jones Professor at Johns Hopkins University

The new “communication attitude” is born “from the awareness that, during the crisis and in its aftermath, central banks got to the limits of their powers and responsibilities and they have to show that, while indeed treading new ground, they remain faithful to their main mission,” Francesco Papadia, senior resident fellow at the think tank Bruegel, told CNBC. The ECB’s main mandate is to ensure stable prices in the euro zone. The Fed, apart from price stability, also monitors the U.S. labour market. Speaking to the European Parliament last week, ECB President Christine Lagarde said the aim of the public events is to “learn directly from civil society organizations and the people what matters most to them, be that rising rents and house prices, job uncertainty or climate change.”

How could monetary policy change?


Company: cnbc, Activity: cnbc, Date: 2020-02-12  Authors: silvia amaro
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China central bank gives greenlight to Mastercard’s China JV for clearing business

China’s central bank said on Tuesday it has approved an application by Mastercard’s China joint venture to conduct bank card clearing operations in the country. The decision, made with China’s banking regulator, is part of efforts to open up China’s financial industry, the People’s Bank of China said in a statement on its website.


China’s central bank said on Tuesday it has approved an application by Mastercard’s China joint venture to conduct bank card clearing operations in the country.
The decision, made with China’s banking regulator, is part of efforts to open up China’s financial industry, the People’s Bank of China said in a statement on its website.
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China central bank gives greenlight to Mastercard's China JV for clearing business

China’s central bank said on Tuesday it has approved an application by Mastercard’s China joint venture to conduct bank card clearing operations in the country.

The decision, made with China’s banking regulator, is part of efforts to open up China’s financial industry, the People’s Bank of China said in a statement on its website.


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Indian central bank holds rates steady as expected amid accelerating inflation

The Reserve Bank of India (RBI) logo is displayed outside of the bank’s headquarters in Mumbai, India, on Tuesday, Aug. 9, 2011. The Reserve Bank of India held rates steady on Thursday in a bid to combat inflation that has accelerated to its highest levels in more than five years, but the central bank retained its accommodative monetary policy stance as growth remains lackluster. The central bank’s Monetary Policy Committee (MPC) decided to leave the key repo rate unchanged at 5.15% and the reve


The Reserve Bank of India (RBI) logo is displayed outside of the bank’s headquarters in Mumbai, India, on Tuesday, Aug. 9, 2011.
The Reserve Bank of India held rates steady on Thursday in a bid to combat inflation that has accelerated to its highest levels in more than five years, but the central bank retained its accommodative monetary policy stance as growth remains lackluster.
The central bank’s Monetary Policy Committee (MPC) decided to leave the key repo rate unchanged at 5.15% and the reve
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Indian central bank holds rates steady as expected amid accelerating inflation

The Reserve Bank of India (RBI) logo is displayed outside of the bank’s headquarters in Mumbai, India, on Tuesday, Aug. 9, 2011.

The Reserve Bank of India held rates steady on Thursday in a bid to combat inflation that has accelerated to its highest levels in more than five years, but the central bank retained its accommodative monetary policy stance as growth remains lackluster.

The central bank’s Monetary Policy Committee (MPC) decided to leave the key repo rate unchanged at 5.15% and the reverse repo rate at 4.9%.

All six committee members voted in accord, and the decision was in line with expectations of economists polled by Reuters.


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Gold gains on bets for low central bank rates as virus woes persist

Gold rose on Thursday as expectations of central banks keeping interest rates low and uncertainties around the economic impact of the coronavirus epidemic fueled appetite for the safe-haven metal. Spot gold gained 0.6% to $1,565.42 per ounce by 1907 GMT, having dropped on Wednesday to its lowest since Jan. 21 at $1,546.90. “Investors are accumulating gold positions at the moment anticipating more quantitative easing programs and lower rates from central banks,” said Bob Haberkorn, senior market


Gold rose on Thursday as expectations of central banks keeping interest rates low and uncertainties around the economic impact of the coronavirus epidemic fueled appetite for the safe-haven metal.
Spot gold gained 0.6% to $1,565.42 per ounce by 1907 GMT, having dropped on Wednesday to its lowest since Jan. 21 at $1,546.90.
“Investors are accumulating gold positions at the moment anticipating more quantitative easing programs and lower rates from central banks,” said Bob Haberkorn, senior market
Gold gains on bets for low central bank rates as virus woes persist Cached Page below :
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Gold gains on bets for low central bank rates as virus woes persist

A mark of 999.9 fine sits on hallmarked one kilogram gold bullion bars at the Valcambi SA precious metal refinery in Lugano, Switzerland, on April 24, 2018.

Gold rose on Thursday as expectations of central banks keeping interest rates low and uncertainties around the economic impact of the coronavirus epidemic fueled appetite for the safe-haven metal.

Spot gold gained 0.6% to $1,565.42 per ounce by 1907 GMT, having dropped on Wednesday to its lowest since Jan. 21 at $1,546.90. U.S. gold futures settled 0.5% up at $1,570.

“Investors are accumulating gold positions at the moment anticipating more quantitative easing programs and lower rates from central banks,” said Bob Haberkorn, senior market strategist at RJO Futures.

Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.

The death toll from the virus in mainland China jumped to 563, with experts stepping up efforts to combat a disease that has shut down Chinese cities and forced thousands more into quarantine around the world.

The World Health Organization on Wednesday played down reports of “breakthrough” drugs being discovered to treat infected people.

“The more activities by the central banks, especially in China, to prop markets up to nullify effects of coronavirus, the more it will help gold,” Haberkorn added.

China said it would halve additional tariffs levied against U.S. goods and has already signed off on more government spending, tax relief and subsidies for virus-hit sectors.

Gold’s gains came despite a record run in Wall Street, a stronger dollar and better-than-expected weekly U.S. jobless claims data.

“You can’t count out gold” despite the rise in stocks or the dollar, given a global slowdown, even in China, would keep “benign interest rates everywhere investors look,” George Gero, managing director at RBC Wealth Management, said in a note.

For future market direction, investors eye the U.S. non-farm payrolls report due on Friday.

“Technically, the gold bulls have the overall near-term technical advantage and have worked to stabilize the market late this week,” Kitco Metals senior analyst Jim Wyckoff said in a note.

Elsewhere, palladium fell 3.2% to $2,353.66 . The metal surged to an all-time high of $2,582.19 on Jan. 20.

Both platinum and palladium, used in emissions-controlling autocatalysts, are seeing some profit-taking due to the weaker sales reported by major U.S. carmaker Ford Motor Co, RBC’s Gero said in a note.

Silver rose 1.2% to $17.81, while platinum slipped 2.4% to $957.83 after touching a one-week high of $987.60.


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Gold rebounds on bargain hunting, bets for loose central bank policy

Gold rose on Wednesday on bargain hunting, reversing course from a two-week low touched earlier, as investors latched on to the metal’s overall uptrend on the back of a low interest rate environment globally and lingering uncertainties. Spot gold rose 0.3% to $1,557.51 per ounce. U.S. gold futures rose 0.4% to settle at $1,560.80 per ounce. “People are coming into the market because of the lower interest rates and the loose policy of global central banks.” Lower interest rates reduce the opportu


Gold rose on Wednesday on bargain hunting, reversing course from a two-week low touched earlier, as investors latched on to the metal’s overall uptrend on the back of a low interest rate environment globally and lingering uncertainties.
Spot gold rose 0.3% to $1,557.51 per ounce.
U.S. gold futures rose 0.4% to settle at $1,560.80 per ounce.
“People are coming into the market because of the lower interest rates and the loose policy of global central banks.”
Lower interest rates reduce the opportu
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Gold rebounds on bargain hunting, bets for loose central bank policy

Freshly cast gold ingot bars sit in the foundry at the JSC Krastsvetmet non-ferrous metals plant in Krasnoyarsk, Russia, on Tuesday, Nov. 5, 2019.

Gold rose on Wednesday on bargain hunting, reversing course from a two-week low touched earlier, as investors latched on to the metal’s overall uptrend on the back of a low interest rate environment globally and lingering uncertainties.

Spot gold rose 0.3% to $1,557.51 per ounce. U.S. gold futures rose 0.4% to settle at $1,560.80 per ounce.

“Overall the trend is up, people want to be in gold right now just because of the central banks and what they’re doing in the long term. So, people are looking at the dip as an opportunity to accumulate more gold,” said Bob Haberkorn, senior market strategist at RJO Futures.

“People are coming into the market because of the lower interest rates and the loose policy of global central banks.”

Gold’s gains came despite a surge in U.S. stock markets, helped by strong monthly domestic private jobs data and reports of progress in developing a treatment to fight the fast-spreading coronavirus, as well as a stronger dollar.

The World Health Organization played down media reports of “breakthrough” drugs being discovered to treat people infected with the new virus, which has claimed about 500 lives in China and has spread to at least 20 other countries.

“When something like a virus comes out, or a big world fear, people shoot first and ask questions later and when they shoot first, they grab gold. This is the buy the pullback mode,” said Michael Matousek, head trader at U.S. Global Investors.

Bullion had slipped to its lowest since Jan. 21 after a Chinese TV report said a research team at Zhejiang University had found an effective drug for the virus.

Investors now await the U.S. non-farm payrolls report on Friday to gauge the strength of the labor sector as the Federal Reserve kept interest rates unchanged in the last meeting, citing continued moderate economic growth and a “strong” job market.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

On the technical side, a break below the $1,545 level could change the pull back into a consolidation while a rise above the $1,560 level could give way to further upside, U.S. Global Investors’ Matousek said.


Company: cnbc, Activity: cnbc, Date: 2020-02-05
Keywords: news, cnbc, companies, bank, bargain, interest, strong, gold, shoot, reports, world, central, rates, global, rebounds, rose, bets, loose, hunting, virus, policy


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Indonesia’s growth in the 4th quarter slows to weakest in 3 years

Indonesia’s economy expanded 4.97% on an annual basis in the October-December quarter, data from the statistics bureau showed on Wednesday, slower than expected in a Reuters poll. Household consumption, which accounts for more than half of Indonesia’s GDP also slowed, with sales of clothes, mobile phones, cars and motorbikes contracting, Suhariyanto, the head of the statistics bureau, said. BI last year cut interest rates four times by 100 basis points and eased lending rules in a bid to prop up


Indonesia’s economy expanded 4.97% on an annual basis in the October-December quarter, data from the statistics bureau showed on Wednesday, slower than expected in a Reuters poll.
Household consumption, which accounts for more than half of Indonesia’s GDP also slowed, with sales of clothes, mobile phones, cars and motorbikes contracting, Suhariyanto, the head of the statistics bureau, said.
BI last year cut interest rates four times by 100 basis points and eased lending rules in a bid to prop up
Indonesia’s growth in the 4th quarter slows to weakest in 3 years Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-05
Keywords: news, cnbc, companies, 4th, weakest, term, gdp, economy, data, slows, growth, bank, quarter, central, trading, indonesias


Indonesia's growth in the 4th quarter slows to weakest in 3 years

Indonesia’s economic growth in the final quarter of 2019 was the slowest in three years, hit by a weakening global economy, and despite supportive efforts by policy makers that included four rate cuts by the central bank.

Growth may ease further for Southeast Asia’s largest economy this quarter due to the impact of the coronavirus outbreak in China, the country’s biggest trading partner and a major source of direct investment.

Indonesia’s economy expanded 4.97% on an annual basis in the October-December quarter, data from the statistics bureau showed on Wednesday, slower than expected in a Reuters poll.

For 2019, the economy grew 5.02%, close to the poll’s forecast but short of the government’s 5.3% target.

Slowing global trade amid the U.S.-China tariff dispute had hurt Indonesia’s important commodity exports, while national elections delayed investment decisions.

Household consumption, which accounts for more than half of Indonesia’s GDP also slowed, with sales of clothes, mobile phones, cars and motorbikes contracting, Suhariyanto, the head of the statistics bureau, said.

Investment also remained sluggish, despite political uncertainty easing in the October-December period following last year’s elections. President Joko Widodo, who won a second term in office, started the term in October.

The rupiah barely moved after the data was released, trading at 13,715 per dollar at 0430 GMT. There was also a muted reaction in the main stock index.

At a separate financial event, ahead of the data, Bank Indonesia (BI) Governor Perry Warjiyo vowed to use all the central bank’s tools to support growth. BI last year cut interest rates four times by 100 basis points and eased lending rules in a bid to prop up GDP growth.

“BI will maintain an accommodative macroprudential policy stance and strengthen coordination with other relevant authorities in order to maintain financial system stability and stimulate the bank intermediation function,” he said.

The governor forecast a GDP growth rate of 5.3% in 2020, in line with the government’s target.

Indonesian authorities have expressed confidence that travel curbs and capital outflows stemming from the virus outbreak that has killed nearly 500 people and infected more than 24,000 others, mostly in China, will not seriously dent Indonesia’s economy.

Chinese tourists represent some 13% of total visitors to Indonesia and the country is also the biggest buyer of Indonesian goods, with any deceleration in China’s growth likely to affect commodity prices.

A central bank official said on Tuesday that any economic impact in 2020 from the coronavirus epidemic will be small.


Company: cnbc, Activity: cnbc, Date: 2020-02-05
Keywords: news, cnbc, companies, 4th, weakest, term, gdp, economy, data, slows, growth, bank, quarter, central, trading, indonesias


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