European Central Bank set for a rate cut in September, economists predict

The European Central Bank (ECB) will next week open the door to an interest rate cut for September, economists have predicted. The deposit facility rate defines the interest banks receive for depositing money with the central bank overnight, and has been negative since June 2014. The current ECB interest rates on its main refinancing operations, marginal lending facility and deposit facility sit at 0%, 0.25% and -0.40% respectively. Against the backdrop of a global slowdown and weak inflationary


The European Central Bank (ECB) will next week open the door to an interest rate cut for September, economists have predicted. The deposit facility rate defines the interest banks receive for depositing money with the central bank overnight, and has been negative since June 2014. The current ECB interest rates on its main refinancing operations, marginal lending facility and deposit facility sit at 0%, 0.25% and -0.40% respectively. Against the backdrop of a global slowdown and weak inflationary
European Central Bank set for a rate cut in September, economists predict Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: elliot smith
Keywords: news, cnbc, companies, european, cut, ecb, guidance, interest, sp, central, bank, rate, rates, economists, inflation, predict, set, manufacturing


European Central Bank set for a rate cut in September, economists predict

The European Central Bank (ECB) will next week open the door to an interest rate cut for September, economists have predicted.

The ECB’s Governing Council is set to meet next Thursday in Frankfurt after euro zone inflation data for June came in higher than expected this week at 1.3%, but remained well below the central bank’s target rate of just below 2%.

The ECB is juggling political uncertainty and an economy sluggishly battling external weaknesses, which have led to a dovish tone of late from its President Mario Draghi.

S&P Global Ratings economists Marion Amiot and Sylvain Broyer expect the ECB to cut its deposit rate by 10 basis points following its September meeting, and potentially resume quantitative easing (QE) in the form of 15 billion euros ($16.85 billion) in asset purchases in October. The deposit facility rate defines the interest banks receive for depositing money with the central bank overnight, and has been negative since June 2014.

“The European economy is still evolving at low gear and two speeds, with robust service activity on the one side but no obvious recovering in manufacturing on the other,” Amiot and Broyer said in a note Thursday.

The German and Italian economies, considered Europe’s premier manufacturing powerhouses, are hovering close to recessionary territory and remain susceptible to several external risks, such as Brexit, the U.S.-China trade war, Iran, a Chinese economic slowdown and potential U.S. tariffs on European car imports.

The S&P economists project that manufacturing weakness is likely to weigh on the robust service sector, suggesting we could see “more downward revisions to growth and inflation forecasts this year.”

The current ECB interest rates on its main refinancing operations, marginal lending facility and deposit facility sit at 0%, 0.25% and -0.40% respectively. Against the backdrop of a global slowdown and weak inflationary pressures, S&P expects the ECB to adjust its forward guidance next Thursday to accommodate a rate cut of 10 basis points (bps) in September.

“A downward bias would allow the ECB to cut rates as soon as September 2019, if the euro strengthens on looser policy by the U.S. Federal Reserve System and market-based inflation expectations do not increase markedly from their current lows,” the note explained.

It added that because the ECB lengthened the timeframe of its forward guidance by one year in June, this meeting would be too early to alter that aspect of the guidance again. However, S&P anticipates that the ECB will “have more work to do in the future on its communication” given the slow development of the euro zone economy.

Amiot and Broyer do not expect the central bank to be able to raise rates again until at least the second quarter of 2021.


Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: elliot smith
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Fed’s Williams hints at more aggressive rate cuts: ‘Better to take preventative measures’

Central bankers need to act quickly and forcefully when rates are low and economic growth is slowing, New York Federal Reserve President John Williams said Thursday. But not when interest rates are in the vicinity of the ZLB,” he said in prepared remarks. However, he said that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.” “The expectation of lower interest rates in the future lowers yields on bonds and thereb


Central bankers need to act quickly and forcefully when rates are low and economic growth is slowing, New York Federal Reserve President John Williams said Thursday. But not when interest rates are in the vicinity of the ZLB,” he said in prepared remarks. However, he said that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.” “The expectation of lower interest rates in the future lowers yields on bonds and thereb
Fed’s Williams hints at more aggressive rate cuts: ‘Better to take preventative measures’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: jeff cox
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Fed's Williams hints at more aggressive rate cuts: 'Better to take preventative measures'

Central bankers need to act quickly and forcefully when rates are low and economic growth is slowing, New York Federal Reserve President John Williams said Thursday.

The influential policymaker delivered a speech discussing what should be done when central banks are near the “zero lower bound,” or close to as low as rates can go.

“It’s better to take preventative measures than to wait for disaster to unfold,” he told the annual meeting of the Central Bank Research Association.

Rather than keep rates elevated to give central banks room to cut in the face of a crisis, Williams said the proper move is not to “keep your powder dry.”

“When the ZLB is nowhere in view, one can afford to move slowly and take a ‘wait and see’ approach to gain additional clarity about potentially adverse economic developments. But not when interest rates are in the vicinity of the ZLB,” he said in prepared remarks. “In that case, you want to do the opposite, and vaccinate against further ills. When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress.”

Williams spoke as the policymaking Federal Open Market Committee is expected to cut its benchmark interest rate during the July 30-31 meeting. Officials are worried about persistently low inflation, spillover from a global slowdown and the fallout from back-and-forth tariffs between the U.S. and China.

The Fed currently pegs the overnight funds rate in a range between 2.25% and 2.5% — above zero, but still well below normal levels that have prevailed during past economic expansions.

Williams did not directly address whether he favors a cut, though markets are pricing in a 100% chance of a quarter-point reduction and a 38% probability that the Fed might cut by half a point, according to the CME.

However, he said that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.”

“The expectation of lower interest rates in the future lowers yields on bonds and thereby fosters more favorable financial conditions overall. This will allow the stimulus to pick up steam, support economic growth over the medium term, and allow inflation to rise,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: jeff cox
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Now the market thinks the Fed could make an even deeper cut to rates later this month

Traders increased their bets on Thursday that the Fed could cut even deeper later this month. “This is a Fed that is data independent.They are not cutting interest rates because of incoming data. They are cutting interest rates because they worry about the future data and they are being pre-emptive,” she said. Now, the Fed has to follow through with a rate cut after its strong signals in order to maintain its credibility. Swonk said some investors believe Powell is responding to Trump by getting


Traders increased their bets on Thursday that the Fed could cut even deeper later this month. “This is a Fed that is data independent.They are not cutting interest rates because of incoming data. They are cutting interest rates because they worry about the future data and they are being pre-emptive,” she said. Now, the Fed has to follow through with a rate cut after its strong signals in order to maintain its credibility. Swonk said some investors believe Powell is responding to Trump by getting
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Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: patti domm
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Now the market thinks the Fed could make an even deeper cut to rates later this month

Like Ben Bernanke and Janet Yellen before him, Federal Reserve Chairman Jerome Powell may be worried that the central bank’s use of extreme policy during the financial crisis left him with a relatively small amount of fire power to head off the next economic decline.

That may make the idea of a so-called insurance rate cut later this month, an attractive option for the Fed chair, who looks determined to cut interest rates even as the domestic economy appears to be showing some signs of strength.

“It’s pretty incredible how strong the data has been. We added 224,000 jobs. We had an extraordinarily strong retail sales report; a 0.3% gain in core CPI month over month. Manufacturing surveys are rebounding. Jobless claims are hovering at cycle lows,” said Michelle Meyer, Bank of America head of U.S. economics. “The set of data heading into the next FOMC meeting is really quite robust.”

Yet, Meyer, like many Wall Street economists, expects Powell’s Fed on July 31 to pull the trigger on a quarter point rate cut, the first since 2008, and possibly the first of several. Traders increased their bets on Thursday that the Fed could cut even deeper later this month.

“This is a Fed that is data independent.They are not cutting interest rates because of incoming data. They are cutting interest rates because they worry about the future data and they are being pre-emptive,” she said. She said the strategy of using some of the few rate hikes the Fed has available to boost the economy, and keep it from rolling over is a gamble.

The Federal Reserve has increased interest rates nine times since it took the fed funds rate range to zero in the face of a looming depression in 2008. The Fed started raising interest rates again in December, 2015 and with quarter point increments, it had taken the fed funds rate range up to 2.25 to 2.50% by December, 2018.

New York Fed President John Williams Thursday added credence to market expectations the Fed will cut rates this month when he said he sees a need for the Fed to vaccinate the economy against risk when rates are low, and that the close proximity of zero rates has changed the way central banks react.

“When you have only so much stimulus at our disposal, it pays to act quickly to lower rates at the first sign of economic distress,” Williams said in a speech. His comments sent interest rates lower, the dollar lower and stocks higher.

“All the incremental data has been positive…what’s interesting is Williams is saying because of the proximity to the zero lower bound and the chance that monetary policy is constrained, they have to be more aggressive. If you only have so much space they have to really take advantage of that opportunity,” said BMO rate strategist Jon Hill.

The futures market is pricing in 100% odds of a quarter-point cut at the Fed’s next meeting and two more this year. Hill said the market priced in even higher odds that the Fed would make a 50 basis point cut in July, following Williams’ comment.

Specifically, the odds of a half-percentage-point cut by the Fed increased to 59% on Thursday following the Williams talk, up from about 35% earlier in the day, according to the CME’s Fedwatch tool.

Joseph LaVorgna, Natixis chief economist Americas, said Williams comments make it seem as though the Fed would be willing to cut by a half percentage point at its July meeting.

“In a weird way the strong data is going to make them go more. The strong data gives them an out. They can cut 50 [basis points] in July. At that point, they can go back to being data dependent. By going back to being data dependent, they actually buy themselves more optionality. They can go back to watching data and they can get more easing into the system,” said LaVorgna. “It’s a way to get future easing out into the market and to do it in a way that’s not destabilizing.”

All over the globe, central bankers are flexing policy, cutting rates and promising more easing as the Fed prepares to move. Indonesia and Korea bankers made surprise rate cuts Thursday morning, the latest in a series of central bank moves, and both the Bank of Japan and European Central Bank have been holding out the possibility of more easy policy.

“The reason they’re not willing to let the economy flirt with recession is because they feel they have limited policy space right now,” said Meyer.

Powell has laid out his reasons for a possible cut, and they did not so much include U.S. economic weakness, as much as he pointed to low inflation, a weak global economy and the unknown impact of trade wars.

“I think the reason the [U.S.] data looks so decent is because the Fed is going to cut. If the Fed had not pirouetted and pivoted, we would not have seen the improvement,” said Diane Swonk, chief economist at Grant Thornton. Now, the Fed has to follow through with a rate cut after its strong signals in order to maintain its credibility.

Powell’s Fed is pivoting, and this time pivoting away from a stricter interpretation of the central bank’s mandate than some of his predecessors. He has assigned the Fed the task of prolonging the economic recovery, commenting a number of times that the Fed “will act as appropriate to sustain the expansion.”

“To put that explicitly in the statement, it’s the Fed’s goal to sustain the expansion. I think they came to the realization that they have more slack in the economy than they realized and they’re pulling people in from the sidelines…It means a 3.7% unemployment rate today doesn’t mean what it meant in the past, ” she said.

The Fed is also fighting a global slowdown because it knows the impact will be felt in the U.S. Williams also noted that foreign central banks, specifically the ECB and Bank of Japan, with their negative yields, have less space to react to trouble, while the U.S. has the space to react to “run of the mill” negative shock.

Meyer expects the Fed to follow through with multiple cuts, but she said if the data holds up, the Fed may find a way to end the rate cutting cycle. But economists say the trade issues are perhaps the thorniest and one the Fed can’t easily combat.

“You’ve got decelerating growth. You’ve got warnings from abroad, and in both September of 1998 and September of 2007, the Fed said let’s cut rates a little bit and we’ll think of them as insurance cuts,” said Luke Tilley, chief economist at Wilmington Trust. In 2007, the economy was heading into the Great Recession and that plan did not work, but it did in 1998.

While the consumer-related data has been showing improvement, much of the U.S. manufacturing data has been weak, along with the rest of the world.

“If the problem with the economy is tariffs, and they keep going up, the Fed does not have the right medicine at their disposal,” said Tilley.

“What we really need to see is an improvement in the U.S. and Chinese trade relationship. If we really went to a bad place, I don’t think there’s much the Fed could do to fix the economy if we get more tariffs on more Chinese goods,” said Tilley..

Swonk said the downside of cutting interest rates for the Fed now is that it could be fueling a bubble in financial markets.

“The other danger of cutting is it looking like they’re being bullied by the White House. That is something they take seriously. It’s why a minority of presidents would rather skip this meeting and make a stand to show they would not capitulate to the president,” said Swonk. Swonk said some investors believe Powell is responding to Trump by getting set to cut interest rates in a good economy, but she does not believe that.


Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: patti domm
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Powell says ‘uncertainties’ have increased chances of a rate cut

Federal Reserve Chairman Jerome Powell repeated his pledge to “act as appropriate” to keep the economic expansion going as his fellow central bankers move toward an expected interest rate cut later this month. “Many FOMC participants judged at the time of our most recent meeting in June that the combination of these factors strengthens the case for a somewhat more accommodative stance of policy,” Powell said in prepared remarks. The speech comes as market participants are strongly anticipating a


Federal Reserve Chairman Jerome Powell repeated his pledge to “act as appropriate” to keep the economic expansion going as his fellow central bankers move toward an expected interest rate cut later this month. “Many FOMC participants judged at the time of our most recent meeting in June that the combination of these factors strengthens the case for a somewhat more accommodative stance of policy,” Powell said in prepared remarks. The speech comes as market participants are strongly anticipating a
Powell says ‘uncertainties’ have increased chances of a rate cut Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-16  Authors: jeff cox
Keywords: news, cnbc, companies, policy, inflation, uncertainties, economic, trade, federal, market, increased, powell, rate, central, chances, cut, speech


Powell says 'uncertainties' have increased chances of a rate cut

Federal Reserve Chairman Jerome Powell repeated his pledge to “act as appropriate” to keep the economic expansion going as his fellow central bankers move toward an expected interest rate cut later this month.

In speech delivered Tuesday in Paris, the central bank chief detailed misgivings among Fed officials over trade developments and global growth that have caused “uncertainties” over the outlook to increase. In addition, he said there is concern over negotiations regarding the federal debt ceiling, Brexit and “a more prolonged shortfall” in inflation below the Fed’s 2% goal.

“Many FOMC participants judged at the time of our most recent meeting in June that the combination of these factors strengthens the case for a somewhat more accommodative stance of policy,” Powell said in prepared remarks. “We are carefully monitoring these developments and assessing their implications for the U.S economic outlook and inflation, and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.”

The speech comes as market participants are strongly anticipating a rate cut at the July 30-31 Federal Open Market Committee policy meeting. Traders have priced in a 100% chance of a reduction in the overnight funds rate from its current targeted range of 2.25% to 2.5%.

From there, the market expects possibly two more cuts coming by the end of 2019 or early 2020, according to fed funds futures contracts and the CME’s FedWatch tool.

Powell did not indicate how much policy loosening was coming, and his remarks were generally positive about economic growth, particularly in the labor market and an unemployment rate near a 50-year low.

He noted weakness in manufacturing and business investment against some improvement in consumer spending.

In addition, Powell noted the influence that actions from other central banks can have on U.S. policy.

“We have seen how monetary policy in one country can influence economic and financial conditions in others through financial markets, trade, and confidence channels. Pursuing our domestic mandates in this new world requires that we understand the anticipated effects of these interconnections and incorporate them into our policy decisionmaking,” he said.

The European Central Bank has indicated that it plans on keeping its own policy easy as it copes with a slowing economy.


Company: cnbc, Activity: cnbc, Date: 2019-07-16  Authors: jeff cox
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‘We are in a currency war, but nobody has admitted it,’ strategist says

Central banks are currently embroiled in a covert currency war which is causing stagnation in foreign exchange markets, according to Thanos Vamvakidis, the global head of G-10 FX strategy at Bank of America Merrill Lynch. Monetary policy easing has been a key theme for central bankers so far in 2019, with the U.S. Federal Reserve, the Bank of England and the European Central Bank (ECB) all signaling dovish stances and fueling speculation of more monetary policy easing. Wall Street analysts have


Central banks are currently embroiled in a covert currency war which is causing stagnation in foreign exchange markets, according to Thanos Vamvakidis, the global head of G-10 FX strategy at Bank of America Merrill Lynch. Monetary policy easing has been a key theme for central bankers so far in 2019, with the U.S. Federal Reserve, the Bank of England and the European Central Bank (ECB) all signaling dovish stances and fueling speculation of more monetary policy easing. Wall Street analysts have
‘We are in a currency war, but nobody has admitted it,’ strategist says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-16  Authors: elliot smith
Keywords: news, cnbc, companies, weaken, policy, trying, strategist, bank, war, currency, admitted, currencies, way, central, monetary


'We are in a currency war, but nobody has admitted it,' strategist says

Central banks are currently embroiled in a covert currency war which is causing stagnation in foreign exchange markets, according to Thanos Vamvakidis, the global head of G-10 FX strategy at Bank of America Merrill Lynch.

Monetary policy easing has been a key theme for central bankers so far in 2019, with the U.S. Federal Reserve, the Bank of England and the European Central Bank (ECB) all signaling dovish stances and fueling speculation of more monetary policy easing.

Wall Street analysts have begun to speculate that President Donald Trump may intervene to weaken the nation’s currency, following a series of comments made by the U.S. president.

Trump most recently complained that China and Europe had embarked on policy moves designed to cheapen their currencies in order to be more competitive with the U.S. on trade, and has repeatedly criticized the Fed over a lack of cuts to interest rates.

Vamvakidis suggested that with most major central banks striking similar tones, currencies are likely to enter deadlock.

“They cannot affect the borrowing cost because interest rates are historically low, so the only way they can ease further monetary conditions is to weaken their currency,” he told CNBC’s “Squawk Box Europe” on Tuesday.

“However, it’s about equilibrium because when everybody is doing it, then currencies don’t really move, you don’t benefit anything because you end up wasting very limited monetary policy ammunition without much of a result. So in a way, we are in a currency war, although nobody has admitted it,” he added.

Vamvakidis argued that although in theory, governments can intervene when currencies are overvalued, the way such interventions are unfolding at present is producing more negative side effects.

“Everybody is trying to move their currencies, but everyone is trying at the same time, and in the end, nobody benefits,” he said. “The collateral damage of all this is that international policy coordination suffers.”


Company: cnbc, Activity: cnbc, Date: 2019-07-16  Authors: elliot smith
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Dollar modestly higher in thin summer trading; upside limited

The dollar was little changed to slightly higher on Monday in thin summer trading, with the greenback’s upside potential hampered by expectations the Federal Reserve will cut interest rates at next week’s policy meeting. Investors expect the Fed to reduce its key rate by 25 basis points and make another cut in September. Money markets have priced in an ECB rate cut of 10 basis points in September and another one in March. In mid-morning trading, an index that tracks the dollar against a basket o


The dollar was little changed to slightly higher on Monday in thin summer trading, with the greenback’s upside potential hampered by expectations the Federal Reserve will cut interest rates at next week’s policy meeting. Investors expect the Fed to reduce its key rate by 25 basis points and make another cut in September. Money markets have priced in an ECB rate cut of 10 basis points in September and another one in March. In mid-morning trading, an index that tracks the dollar against a basket o
Dollar modestly higher in thin summer trading; upside limited Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15
Keywords: news, cnbc, companies, trading, modestly, upside, yuan, cut, limited, dovish, dollar, central, rate, fed, summer, euro, markets, higher


Dollar modestly higher in thin summer trading; upside limited

The dollar was little changed to slightly higher on Monday in thin summer trading, with the greenback’s upside potential hampered by expectations the Federal Reserve will cut interest rates at next week’s policy meeting.

Investors expect the Fed to reduce its key rate by 25 basis points and make another cut in September. Foreign exchange markets were quiet on Monday and volatility low ahead of major central bank policy decisions next week.

The European Central Bank also holds a meeting next week, with investors expecting a dovish statement. Money markets have priced in an ECB rate cut of 10 basis points in September and another one in March.

The ECB’s meeting on July 25 may reinforce those expectations. Forecasts for dovish moves by both the Fed and ECB have kept euro/dollar stuck in a narrow range for weeks.

“Until we get the news out of the G7 central banks later in this month and later into the summer, we are likely to remain rather range-bound and relatively quiet,” said Brad Bechtel, managing director, Jefferies in New York. “Even then, we all know what to expect, more or less.”

In mid-morning trading, an index that tracks the dollar against a basket of six other major currencies was slightly higher at 96.95.

The dollar was little changed versus the yen at 107.865 .

The euro was flat at $1.1255, trading within the recent range of $1.14 to $1.11.

Investors are more bearish on the euro, since U.S. Treasury yields look set to remain among the highest in developed markets despite future Fed rate cuts, analysts say.

Some analysts, however, are surprised the euro is not gaining given that the market has priced in Fed easing.

“For the world’s most-traded and least-exciting currency pair, a dovish Fed, a weak-dollar president and a hint of global economic optimism, ‘ought’ to mean euro/dollar rallies,” said Kit Juckes, FX strategist at Societe Generale. “If it (the euro) can’t stage a move back to $1.14 in the next week or two, what on earth could make it rally?”

Elsewhere, the Australian dollar, the currency most sensitive to Chinese news, hit a more than one-week high on stronger-than-expected economic data from China. China’s industrial output rebounded in June from a 17-year low in May, while June retail sales surged 9.8% from a year earlier.

The Aussie was last up 0.1% at US$0.7031 against the U.S. dollar, while China’s offshore yuan was up 0.1% at 6.8742 yuan per dollar.


Company: cnbc, Activity: cnbc, Date: 2019-07-15
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Rate cut bets keeps dollar on track for biggest weekly drop in three weeks

Against a basket of other currencies, the dollar fell 0.1% to 96.94 and was on track for its biggest weekly drop in three weeks. The core U.S. consumer price index, excluding food and energy, rose 0.3% in June, the largest increase since January 2018, data on Thursday showed. Other currencies which benefited from a weaker dollar were in markets whose central banks signaled a relatively confident outlook to interest rates. Sweden’s crown also benefited from a relatively optimistic assessment of i


Against a basket of other currencies, the dollar fell 0.1% to 96.94 and was on track for its biggest weekly drop in three weeks. The core U.S. consumer price index, excluding food and energy, rose 0.3% in June, the largest increase since January 2018, data on Thursday showed. Other currencies which benefited from a weaker dollar were in markets whose central banks signaled a relatively confident outlook to interest rates. Sweden’s crown also benefited from a relatively optimistic assessment of i
Rate cut bets keeps dollar on track for biggest weekly drop in three weeks Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-12
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Rate cut bets keeps dollar on track for biggest weekly drop in three weeks

The dollar fell for a third consecutive day on Friday as stronger-than-expected U.S. inflation data failed to shake convictions that the Federal Reserve will start cutting interest rates at a policy meeting later this month.

Against a basket of other currencies, the dollar fell 0.1% to 96.94 and was on track for its biggest weekly drop in three weeks.

The core U.S. consumer price index, excluding food and energy, rose 0.3% in June, the largest increase since January 2018, data on Thursday showed.

The reading pushed U.S. Treasury yields higher, but money markets still indicated one rate cut at the end of July and a cumulative 64 basis points in cuts by the end of 2019.

“Cutting interest rates when inflation data is weakening makes sense, but signalling a dovish stance when inflation is rising is a bit weird and suggests there are political pressures weighing on the Fed,” said Ulrich Leuchtmann, the head of currency research at Commerzbank.

The dollar’s weakness revived carry trades, where hedge funds borrow in low-yielding currencies such as the Swiss franc and the euro to purchase higher-yielding ones such as the Australian or New Zealand dollars.

On Friday, the NZ dollar gained 0.3% to $0.6665.

Other currencies which benefited from a weaker dollar were in markets whose central banks signaled a relatively confident outlook to interest rates.

The Canadian dollar was one such beneficiary: the loonie rallied to a 10-month high versus the U.S. dollar after Canada’s central bank said this week it had no intention of easing monetary policy even as it highlighted the risks that trade wars posed to the global economy.

Higher oil prices also helped the Canadian dollar.

Sweden’s crown also benefited from a relatively optimistic assessment of its economic outlook after minutes of the central bank’s policy meeting.

The euro trimmed earlier gains after European Central Bank Governing Council member Ignazio Visco said on Friday the ECB will need to adopt further expansionary measures if the euro zone economy does not pick up and will consider its options “in the coming weeks”.

The single currency was flat at $1.1258, below an intraday high of $1.1275 in early London trading.

Market attention will be focused on comments by Chicago Fed President Charles Evans later on Friday and New York Fed President John Williams on Monday which will provide a chance to gauge how dovish the U.S. central bank will be.

“If these Fed officials are not as dovish as (Federal Reserve Chair Jerome) Powell, and if the New York Fed’s manufacturing survey on Monday proves stronger than forecast, they could show that the dollar weakening in response to Powell’s congressional testimony was overdone,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.

Powell indicated again on Thursday that an interest rate cut from the U.S. central bank is likely at its next meeting later this month as businesses slow investment due to trade disputes and a global growth slowdown.


Company: cnbc, Activity: cnbc, Date: 2019-07-12
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Gold eases after surprise US CPI jump, holds above $1,400

U.S. gold futures for August delivery were up 0.26% to $1,408.8 per ounce. Gold prices had touched a one-week high of $1,426 earlier in the session. The U.S. Federal Reserve last month downgraded its inflation projection for 2019 to 1.5% from the 1.8% projected in March. Policymakers from the U.S. central bank are scheduled to meet on July 30-31, where investors will look for further cues on monetary policy easing. Indicative of investor sentiment, holdings of SPDR Gold Trust, the world’s larges


U.S. gold futures for August delivery were up 0.26% to $1,408.8 per ounce. Gold prices had touched a one-week high of $1,426 earlier in the session. The U.S. Federal Reserve last month downgraded its inflation projection for 2019 to 1.5% from the 1.8% projected in March. Policymakers from the U.S. central bank are scheduled to meet on July 30-31, where investors will look for further cues on monetary policy easing. Indicative of investor sentiment, holdings of SPDR Gold Trust, the world’s larges
Gold eases after surprise US CPI jump, holds above $1,400 Cached Page below :
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Gold eases after surprise US CPI jump, holds above $1,400

Gold prices fell on Thursday, erasing gains made early in the day after stronger-than-expected consumer inflation in the United States cast doubts whether the U.S. central bank will cut interest rates as aggressively as expected.

Spot gold dipped 0.85% to $1,406.8 per ounce, dropping nearly $6 after U.S. consumer prices demonstrated a pick-up in underlying inflation, increasing in June by the most in nearly 1-1/2 years.

U.S. gold futures for August delivery were up 0.26% to $1,408.8 per ounce.

Gold prices had touched a one-week high of $1,426 earlier in the session.

The U.S. Federal Reserve last month downgraded its inflation projection for 2019 to 1.5% from the 1.8% projected in March. However, this may probably not change expectations the bank will cut interest rates this month.

“We saw todays inflation data – the markets started to back off today because it challenges the need for additional rate cuts,” said Chris Gaffney, president of world markets at TIAA Bank, calling bullion’s decline a knee-jerk reaction.

“(Thursday’s move) is just an adjustment of the fact that maybe it had gone up a little fast yesterday, but is still holding nicely above $1,400, and it looks like we going to continue holding above $1,400.”

Spot gold rose 1.5% on Wednesday after Fed Chair Jerome Powell’s dovish remarks, where he confirmed the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering trade war, and said the Fed stood ready to “act as appropriate.”

This statement weighed on the dollar. The U.S. currency against major other currencies extended declines for a second session.

Policymakers from the U.S. central bank are scheduled to meet on July 30-31, where investors will look for further cues on monetary policy easing.

Gold rallied to a six-year peak of $1,438.63 an ounce last month, largely on the back of expectations of rate cuts by key central banks amid concerns over the global economy.

“A break above $1,438 may lead to further buying orders with $1,500 being the next level traders looking to target,” Hussein Sayed, chief market strategist at FXTM, wrote in a note.

Indicative of investor sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.8% on Wednesday.

Amongst other precious metals, palladium erased gains and dipped 1.4% to $1,567.01 per ounce, having earlier hit a high of $1,605.52.

Silver was down 0.1% to $15.22, while spot platinum gained 0.3% to $827.25 per ounce.


Company: cnbc, Activity: cnbc, Date: 2019-07-11
Keywords: news, cnbc, companies, jump, rates, prices, rose, surprise, holds, inflation, gold, 1400, nearly, cpi, rate, ounce, bank, central, eases


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Five things to know about Christine Lagarde, the first woman to lead the European Central Bank

JOHN THYS | AFP | Getty ImagesChristine Lagarde is set to become the first female president of the European Central Bank later this year. The appointment of the former French finance minister marks only the latest step in a career notable for history-making moments. Rising through the ranks at her law firm, Lagarde specialized in labor law and anti-trust, as well as mergers and acquisitions. Mark Rutte Dutch prime ministerIn 2005, she left Baker McKenzie to jump deep into the world of politics a


JOHN THYS | AFP | Getty ImagesChristine Lagarde is set to become the first female president of the European Central Bank later this year. The appointment of the former French finance minister marks only the latest step in a career notable for history-making moments. Rising through the ranks at her law firm, Lagarde specialized in labor law and anti-trust, as well as mergers and acquisitions. Mark Rutte Dutch prime ministerIn 2005, she left Baker McKenzie to jump deep into the world of politics a
Five things to know about Christine Lagarde, the first woman to lead the European Central Bank Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-11  Authors: silvia amaro
Keywords: news, cnbc, companies, european, french, things, finance, female, woman, christine, tapie, imf, lagarde, lead, know, minister, law, central, bank, tough


Five things to know about Christine Lagarde, the first woman to lead the European Central Bank

International Monetary Fund (IMF) managing Director Christine Lagarde smiles during a press conference. JOHN THYS | AFP | Getty Images

Christine Lagarde is set to become the first female president of the European Central Bank later this year. The appointment of the former French finance minister marks only the latest step in a career notable for history-making moments.

1. Lawyer turned finance minister

Christine Lagarde was born in Paris and completed most of her studies in France. She graduated from law school at Paris Nanterre University. After being admitted to the Paris Bar, she joined the multinational law firm Baker McKenzie. Rising through the ranks at her law firm, Lagarde specialized in labor law and anti-trust, as well as mergers and acquisitions.

I know Christine Lagarde as the boss of the IMF, I know her as a tough lady, as somebody who knows what she wants, who is very clear on giving directions. Mark Rutte Dutch prime minister

In 2005, she left Baker McKenzie to jump deep into the world of politics as French minister for foreign trade. Within two years, she was appointed as finance and economy minister of France — becoming the first female chief of finance of a G-7 country.

2. The first IMF female chief

But her upward trajectory didn’t stop there: In 2011, she was nominated managing director of the International Monetary Fund — becoming the first woman to hold that position. She has led the Washington-based institution since then. Lagarde oversaw bailout programs for Greece, Portugal and Ireland during the sovereign debt crisis that peaked in 2001 and 2012. The three countries use the euro currency as members of the euro zone — meaning she knows the economies she’ll soon serve as central bank chief.

3. The first female ECB president

Earlier this month, representatives of 28 European countries selected her as the next president of the ECB, where her primary task will be to control inflation and enforce monetary policy decisions for the bloc. She is due to start her new job on November 1. “I know Christine Lagarde as the boss of the IMF. I know her as a tough lady, as somebody who knows what she wants, who is very clear on giving directions,” Mark Rutte, Dutch Prime Minister, told CNBC. “When you come to her to get a loan, (she is) very tough on conditions, so I wouldn’t like to be the European country who needs to go to the ECB asking for favors.”

4. The Tapie Affair

While finance minister of France, Lagarde reportedly stepped in to end a 14-year court dispute by ordering a panel of judges to arbitrate a case involving businessman Bernard Tapie — a friend of the French President, Nicolas Sarkozy. The case ended with an order on the French state to repay about 400 million euros in damages to Tapie.

Opponents say Lagarde interfered in the justice system. Supporters argue that the government would have faced a bigger bill if the process had dragged on. Lagarde’s subsequent decision not to appeal the panel’s bumper award to Tapie would later see her found guilty of negligence by a court that rules on cases of ministerial misconduct. Lagarde, who could have given up to one-year in prison and a 13,000 euro fine ($14,650), received no punishment.

5. Synchronized swimmer


Company: cnbc, Activity: cnbc, Date: 2019-07-11  Authors: silvia amaro
Keywords: news, cnbc, companies, european, french, things, finance, female, woman, christine, tapie, imf, lagarde, lead, know, minister, law, central, bank, tough


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Facebook’s Libra cryptocurrency again comes under fire from global policymakers

The social network’s digital token, called Libra, continues to be faced with warnings from the international community, amid ongoing worries about its regulatory implications. But French officials aren’t the only ones casting doubt on Facebook’s Libra. Speaking after the launch of the central bank’s financial stability report, Carney said Libra could be faced with regulatory hurdles, adding to the chorus of global policymakers warning about Libra. Such regulatory warnings have led to questions o


The social network’s digital token, called Libra, continues to be faced with warnings from the international community, amid ongoing worries about its regulatory implications. But French officials aren’t the only ones casting doubt on Facebook’s Libra. Speaking after the launch of the central bank’s financial stability report, Carney said Libra could be faced with regulatory hurdles, adding to the chorus of global policymakers warning about Libra. Such regulatory warnings have led to questions o
Facebook’s Libra cryptocurrency again comes under fire from global policymakers Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-11  Authors: ryan browne
Keywords: news, cnbc, companies, successful, regulatory, comes, libra, facebook, central, digital, policymakers, currency, carney, senate, global, facebooks, cryptocurrency


Facebook's Libra cryptocurrency again comes under fire from global policymakers

Facebook announced its cryptocurrency, called Libra. Chesnot | Getty Images News | Getty Images

Facebook’s planned cryptocurrency hasn’t even launched yet, but it’s been the talk of the town for politicians and central bankers worldwide. The social network’s digital token, called Libra, continues to be faced with warnings from the international community, amid ongoing worries about its regulatory implications. French Finance Minister Bruno Le Maire on Thursday reiterated that he was against the idea of Libra becoming a “sovereign currency” that gives it the chance to compete with government-backed currencies like the euro. “My determination to make sure that Facebook’s … Libra project does not become a sovereign currency that could compete with the currency of states is … absolute,” Le Maire said in a speech to the French Senate Thursday. “Because I will never accept that corporations could become private states.” Le Maire was addressing the Senate as France readies a contentious new tax aimed at making technology giants like Facebook, Google and Amazon pay their fair share. The Senate approved the levy Thursday morning, a move that will likely anger the U.S. But French officials aren’t the only ones casting doubt on Facebook’s Libra. Just a day earlier, Federal Reserve Chairman Jerome Powell called on the social network to halt plans for its digital token, worried regulators are lacking answers from the company on matters such as privacy and consumer protection.

“Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability,” Powell said at a congressional committee Wednesday. America’s top central banker added the Fed has established a working group to look into the project.

‘It’s either successful or it isn’t’

Bank of England Governor Mark Carney once again warned against Libra. Speaking after the launch of the central bank’s financial stability report, Carney said Libra could be faced with regulatory hurdles, adding to the chorus of global policymakers warning about Libra. “It’s either successful or it isn’t,” Carney said Thursday. “If it’s successful it becomes systemic, because it would involve a very large number of users. If you’re a systemic payment system … you have to be on all the time, you can’t have teething issues, you can’t have people losing money out of their wallets.” The U.K. central bank chief said Facebook cannot “learn on the job,” adding: “It’s got to be rock solid right from the start, or it’s not going to start.” Carney has previously said that any such currency would “have to be subject to the highest standards of regulations,” although he has also said he’s keeping an open mind on Facebook’s crypto venture. The G-7 — which includes France, Britain and the U.S. — is forming a task force to assess the risks posed by digital currencies like Facebook’s to the financial system.

Such regulatory warnings have led to questions over whether Facebook will be able to roll out its digital currency on time. Libra is currently scheduled to launch next year, but some in the tech community think that timing may be too ambitious.

What is Libra?


Company: cnbc, Activity: cnbc, Date: 2019-07-11  Authors: ryan browne
Keywords: news, cnbc, companies, successful, regulatory, comes, libra, facebook, central, digital, policymakers, currency, carney, senate, global, facebooks, cryptocurrency


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