The Fed won’t cut rates at its June meeting. Here’s why

Federal Reserve Chairman Jerome Powell holds a press conference following a two day Federal Open Market Committee policy meeting in Washington, January 30, 2019. “The Fed is going to look at the data, they’re going to look at what their models say. As things stand currently among Chairman Jerome Powell and his fellow Fed officials, no moves are indicated. He noted the “big divergence” between the market and Fed projections and said, “No cuts this year is hard to believe.” Fed officials have been


Federal Reserve Chairman Jerome Powell holds a press conference following a two day Federal Open Market Committee policy meeting in Washington, January 30, 2019. “The Fed is going to look at the data, they’re going to look at what their models say. As things stand currently among Chairman Jerome Powell and his fellow Fed officials, no moves are indicated. He noted the “big divergence” between the market and Fed projections and said, “No cuts this year is hard to believe.” Fed officials have been
The Fed won’t cut rates at its June meeting. Here’s why Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: jeff cox
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The Fed won't cut rates at its June meeting. Here's why

Federal Reserve Chairman Jerome Powell holds a press conference following a two day Federal Open Market Committee policy meeting in Washington, January 30, 2019. Leah Millis | Reuters

With pretty much everyone convinced that the Fed is going to be cutting interest rates at some point this year, the central bank faces one rather pressing question: Why wait? After all, the market already is pricing in at least reductions this year and probably three. Though the Federal Open Market Committee meets next week, there is little expectation of a move then. Not moving next week essentially comes down to three factors, according to Fed watchers: The looming G-20 summit at which the U.S. and China, at least theoretically, could reach a trade agreement; a desire not to be seen as overly influenced by the financial markets and President Donald Trump’s hectoring; and the desire to avoid making December’s rate hike look like a policy mistake.

“They don’t want to be seen as cowing to any sort of pressure, be it political from the White House or from the market,” said Lindsey Piegza, chief economist at Stifel. “The Fed is going to look at the data, they’re going to look at what their models say. To them, it doesn’t matter what the markets say.”

‘No cuts this year is hard to believe’

Wall Street, though, is clamoring for a cut. Futures pricing Friday afternoon in the fed funds market showed a 21% chance of a move at the June 18-19 meeting, down from 30% earlier in the day on some stronger-than-expected economic data. The chance of a July cut remained at 85%, while the market was figuring a 61% probability for three moves in total by the end of the year. As things stand currently among Chairman Jerome Powell and his fellow Fed officials, no moves are indicated. That is likely to change when FOMC members submit their economic projections at the June 18-19 meeting, which include the “dot plot” of individual members’ expectations of where rates are headed over the next few years. “I can’t imagine what they are going to do with the dots,” Jeffrey Gundlach, founder of DoubleLine Capital, said in a webcast Thursday. He noted the “big divergence” between the market and Fed projections and said, “No cuts this year is hard to believe.” In May, Gundlach recommended a straddle options trade that benefited from wide fluctuations in interest rates. The trade recently had netted a 22% gain. Fed officials have been under intense pressure from more than the markets. Trump has been a continuous nemesis to the central bank, most recently repeating his demand for lower rates and saying he’s “not happy with what [Powell has] done” as Fed chair. Along the same lines, the Fed has its credibility to worry about. Trump and a growing number of market participants view the December rate hike — the fourth of the year — as a policy mistake that came amid several pivots and missteps that caused Powell and other officials to change their public statements to assuage investors’ nerves.

‘A verbal intervention’


Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: jeff cox
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China’s Vice Premier Liu He calls for more measures to support economy

Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019. Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure. Beijing has plenty of policy tools and is capable of deali


Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019. Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure. Beijing has plenty of policy tools and is capable of deali
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China's Vice Premier Liu He calls for more measures to support economy

Liu He, China’s vice premier, speaks as U.S. President Donald Trump, right, listens during a meeting in the Oval Office of the White House in Washington, D.C., U.S., on Thursday, April 4, 2019.

Chinese regulators should step up support for the economy and keep ample liquidity in the financial system, Vice Premier Liu He said on Thursday, suggesting Beijing would soon unveil more policies to bolster growth amid rising U.S. trade pressure.

Beijing has plenty of policy tools and is capable of dealing with various challenges, Liu said at a financial forum in Shanghai.

Despite a slew of support measures and policy easing since last year, China’s cooling economy is still struggling to get back on firm footing, and last month’s sudden escalation in U.S.-Sino tensions has raised fears of a full-blown trade war that could trigger a global recession.

Liu’s comments came after a day after data showed China’s credit growth was weaker than expected in May, reinforcing market expectations that more monetary easing is needed. Factory activity contracted in May and imports fell the most in nearly three years, highlighting soft demand.

“At present, we do have some external pressures, but those external pressures will help us boost our self-reliance in innovation and accelerate the pace of high-speed development,” said Liu, who is also the lead negotiator in the U.S.-China trade talks.

The government will roll out more strong measures to promote reforms and opening up, added Liu.

People’s Bank of China chief Yi Gang said last week that there was “tremendous” room to make policy adjustments if the trade war worsens.

“We have plenty of room in interest rates, we have plenty of room in the required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous,” Yi said.

Earlier on Thursday, China Daily, citing economists, said China is expected to adjust money and credit supply in coming weeks, including cuts to interest rates or reserve ratio requirements, to counter “downside risks” if trade tensions escalate.

Further cuts in banks’ reserve requirement ratios (RRR) were already expected this year, especially after the trade conflict escalated last month. Both sides hiked tariffs on each other’s goods, and Washington is threatening more.

Last month, the PBOC stepped up efforts to increase loan growth and business activity, announcing a three-phase cut in regional banks’ reserve requirements to reduce financing costs for small and private companies.

It has now cut six RRR times since early 2018.

Unlike previous downturns, however, the central bank has been reluctant to cut benchmark interest rates so far. Analysts believe it is held off on more aggressive measures due to concerns that such a move could risk adding a mountain of debt leftover from past stimulus sprees.

More forceful easing could also trigger capital outflows and add pressure on the Chinese yuan, which has slid nearly 3 percent against the dollar since the trade flare-up last month.

Sources told Reuters in February that the PBOC considered a benchmark rate cut a last resort. But some analysts now think one or more cuts are likely if the trade dispute spirals out of control and the U.S. Federal Reserve starts cutting its rates, giving the PBOC more room to manoeuvre.

Citing experts, China Daily said financial institutions were facing tighter liquidity in June, and said authorities want to spur faster credit growth to meet economic growth targets.

Beijing has set a growth target of around 6 to 6.5 percent for this year, easing from 6.6 percent in 2018, which was the slowest rate of expansion the country has seen in nearly 30 years.

Analysts at Bank of America Merrill Lynch believe China’s GDP growth could fall to 5.8 percent this year and 5.6 percent in 2020 if the trade war intensifies.


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The Fed should cut rates next week, but it won’t, Wharton’s Jeremy Siegel warns. Here’s why.

Stocks have rallied within range of records on high hopes for a rate cut, possibly as soon as next week. “They should cut rates, but they won’t — not quite yet,” Siegel told CNBC’s “Trading Nation ” on Wednesday. Siegel says the Fed will first want to lay the groundwork for a rate cut before it takes action, a process requiring a longer time frame beyond next week’s meeting. Even when the Fed cuts rates next, Spiegel says it might be too little to spur the kind of economic growth anticipated. So


Stocks have rallied within range of records on high hopes for a rate cut, possibly as soon as next week. “They should cut rates, but they won’t — not quite yet,” Siegel told CNBC’s “Trading Nation ” on Wednesday. Siegel says the Fed will first want to lay the groundwork for a rate cut before it takes action, a process requiring a longer time frame beyond next week’s meeting. Even when the Fed cuts rates next, Spiegel says it might be too little to spur the kind of economic growth anticipated. So
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Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: keris lahiff
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The Fed should cut rates next week, but it won't, Wharton's Jeremy Siegel warns. Here's why.

Stocks have rallied within range of records on high hopes for a rate cut, possibly as soon as next week.

Investors could be waiting a little longer, warns Wharton professor of finance Jeremy Siegel.

“They should cut rates, but they won’t — not quite yet,” Siegel told CNBC’s “Trading Nation ” on Wednesday. “I think they’re going to put out a directive that says in their next meeting which will be July 31st after the June meeting that they’re very likely to cut rates and I think the market will be satisfied with that. ”

The Federal Open Market Committee is set to meet Tuesday, culminating with a decision on Wednesday afternoon. Markets are pricing in a 20% chance of a 25-basis-point cut at the June meeting, according to CME fed funds futures, with those odds jumping to 66% at the July meeting.

Siegel says the Fed will first want to lay the groundwork for a rate cut before it takes action, a process requiring a longer time frame beyond next week’s meeting.

“The Fed is very deliberate. Before they move, they like to make announcements and speeches. They haven’t really had a chance to really prepare those. We still could get a cut. There may be some dissents among the Fed officials saying I want to cut now, but I say the odds are a setup for a cut that will come at the end of July,” he said.

Even when the Fed cuts rates next, Spiegel says it might be too little to spur the kind of economic growth anticipated.

“The Fed is a little bit too slow,” he said. “There should be a 50-basis-point cut. Given where the 10-year [Treasury note] is right now, we should be below on the funds rate than the 10-year, and even 25 basis points won’t really put us below. So I really think there should be more.”

The 10-year has come back from the year’s lows last week, though still trades at its lowest level in nearly two years. Yields fall when bond prices rise, an indication that investors are flocking to safe-haven assets such as Treasurys. The effective fed funds rate guides banks on the interest rate at which they lend excess reserves. A lower rate encourages more lending and borrowing.

Beyond the Fed, investors also need a resolution on the trade war before the stock market can make larger strides higher, says Siegel.

“Right now projections are Q2 growth is 1.5%. That would be the slowest during the Trump presidency. … If the tariff clouds continue to gather in second half of the year, we may barely reach 2%,” he said. “Short term, it’s going to be hard to make big gains with the trade clouds and the interest rate clouds hanging over the market.”

The U.S. economy ended 2018 with economic growth at 2.9%. A slowdown to sub-2% would mark its lowest level since 2016.


Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: keris lahiff
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‘Perfect storm’ for dollar as bets on US rate cuts grow

The dollar fell on Wednesday as rising trade tensions between Washington and Beijing and growing bets on a U.S. interest rate cut sapped investor demand for the currency. A Fed watch tool by CME assigns a 18% probability of a U.S. rate cut next week and a 68% probability of a cut in July. “This is a perfect storm for the dollar, and that is also undermining risk appetite broadly in the market,” said Ricardo Evangelista, a senior analyst at ActivTrades in London. It also weakened against the Hong


The dollar fell on Wednesday as rising trade tensions between Washington and Beijing and growing bets on a U.S. interest rate cut sapped investor demand for the currency. A Fed watch tool by CME assigns a 18% probability of a U.S. rate cut next week and a 68% probability of a cut in July. “This is a perfect storm for the dollar, and that is also undermining risk appetite broadly in the market,” said Ricardo Evangelista, a senior analyst at ActivTrades in London. It also weakened against the Hong
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'Perfect storm' for dollar as bets on US rate cuts grow

The dollar fell on Wednesday as rising trade tensions between Washington and Beijing and growing bets on a U.S. interest rate cut sapped investor demand for the currency.

Against a basket of other currencies, the dollar edged 0.1 percent lower to 96.64 and just above a two-and-a-half-month low of 96.46 reached last week.

The dollar has suffered a setback after the latest escalation of the U.S.-China trade, which analysts fear could tip the global economy into recession.

Those fears have grown as recent data have pointed to a global economic slowdown. Chinese factory inflation slowed in May and Fed officials have become increasingly cautious. That has fuelled expectations of U.S. rate cuts, a shift from a few months.

A Fed watch tool by CME assigns a 18% probability of a U.S. rate cut next week and a 68% probability of a cut in July.

“This is a perfect storm for the dollar, and that is also undermining risk appetite broadly in the market,” said Ricardo Evangelista, a senior analyst at ActivTrades in London.

The dollar slipped as much as 0.2% against the pound, taking its losses to nearly 1% so far this month.

It also weakened against the Hong Kong dollar, which rose towards the midpoint of a daily trading range as bond auctions and large listings in the local stock market sucked cash from the local market.

The local dollar also strengthened as the city was roiled by violent protests against an extradition bill that would allow people to be sent to mainland China.


Company: cnbc, Activity: cnbc, Date: 2019-06-12
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Gold climbs on Fed rate cut speculation, growth concerns

Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards. Gold prices gained momentum on Wednesday as the dollar dipped on speculation the U.S. central bank would cut interest rates this year amid concerns about waning global economic growth. U.S. gold futures were up 0.4% to $1,336.60 per ounce. Adding to concerns, U.S. consumer prices barely rose in May, likely increasing pressure on the Fed to cut interest rates this year. Lower interest rates make safe-haven asse


Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards. Gold prices gained momentum on Wednesday as the dollar dipped on speculation the U.S. central bank would cut interest rates this year amid concerns about waning global economic growth. U.S. gold futures were up 0.4% to $1,336.60 per ounce. Adding to concerns, U.S. consumer prices barely rose in May, likely increasing pressure on the Fed to cut interest rates this year. Lower interest rates make safe-haven asse
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Gold climbs on Fed rate cut speculation, growth concerns

Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards.

Gold prices gained momentum on Wednesday as the dollar dipped on speculation the U.S. central bank would cut interest rates this year amid concerns about waning global economic growth.

Spot gold was trading 0.5% higher at $1,332.80 per ounce, a rebound from the previous session when it fell to a 10-day low of $1,319.35.

U.S. gold futures were up 0.4% to $1,336.60 per ounce.

“Today, global equities are weaker, there is some safe-haven buying, and buying ahead of the U.S. Fed meeting next week,” said Bob Haberkorn, senior market strategist at RJO Futures.

“If the Fed cuts rates in June, youre going to see some substantial gains here in the precious metals market … People are trying to get ahead of that and add some gold to their portfolio.”

Global equities snapped a seven-day winning streak after U.S. President Donald Trump said he had no interest in moving ahead with a trade deal with China unless Beijing agreed to four or five “major points.”

Adding to concerns, U.S. consumer prices barely rose in May, likely increasing pressure on the Fed to cut interest rates this year.

Fed policymakers will meet on June 18-19. Markets have priced in at least two U.S. rate cuts by the end of 2019. Futures imply around an 80% chance of a rate cut as early as July.

Lower interest rates make safe-haven assets such as gold, which does not yield interest, more attractive while weighing on the dollar. The U.S. currency was trading largely unchanged against a basket of currencies on Wednesday.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell marginally to 756.18 tonnes on Tuesday from 756.42 tonnes on Monday.

The gold bulls have the overall near-term technical advantage and regained momentum today, ” Jim Wyckoff, senior analyst at Kitco, said in a note. He added that the next upside price target would be a close in August futures above June’s high of $1,352.70.

Among other metals, silver was up 0.6% to $14.79 per ounce, while platinum inched 0.2% higher to $814.50.

Palladium was little changed at $1,394.30 per ounce, having hit a six-week high of $1,404 earlier in the session. The autocatalyst metal was trading higher for a fifth consecutive session.


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Fed ‘insurance’ rate cuts while the economy is fine usually boost the stock market, history shows

When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well. J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. U.S.Treasury have historically rallied, and the curve continued to s


When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well. J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. U.S.Treasury have historically rallied, and the curve continued to s
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Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
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Fed 'insurance' rate cuts while the economy is fine usually boost the stock market, history shows

When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well.

So-called “insurance ” rate cuts with a backdrop of strong growth — which happened in 1995 and 1998 — resulted in solid equity market performance, according to analysis by J.P. Morgan. But not all rate cuts are created equal. The stock market reaction depends on the justification for slashing rates.

“If the reason is weakening growth then this is not a good environment for equities overall, especially cyclical sectors, even as defensive and bond like equities do relatively well in such environment,” J.P. Morgan global markets strategist Nikolaos Panigirtzoglou said in a note to clients Monday.

J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The late 1990s rate cuts were used as insurance against Mexican and Russian default and collapse of hedge fund Long-Term Capital Management at the time, bolstered the equity market. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. At the time, there was an 8.5% reduction in the Fed funds rate from 20% to 11.5% — a level of monetary easing that is “obviously not possible in the current conjuncture,” Panigirtzoglou said.

The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. Distinguishing which type of easing cycle 2019 will turn out to be “is the challenge for equity markets going forward,” he said. For now, markets appear to be assuming that Federal Reserve officials’ dovish comments are signs of a preemptive, rather than reactive move.

Investors have been focused on the likelihood of an “insurance” interest-rate cut this year. That would theoretically provide a buffer against any economic weakness caused by an ongoing trade war and tariffs with China.

Weaker employment data last week added to the investors’ hopes of a rate cut. The economy added only 75,000 jobs in May, less than half of what economists had expected. Now that the job market is showing signs of strain, economists and investors now firmly believe the Federal Reserve will move to cut rates this year. The market is now pricing in a 95 percent chance of a quarter-point cut in July, according to BMO rate strategist Jon Hill. The Fed next meets June 18-19 and July 30-31.

On the other hand, if the central bank ends up being “reactive,” markets may not see the same benefits, Panigirtzoglou said. This could play out if the Federal Reserve decides to wait until later in the year, or it proves to be “too late” and the U.S. economy has already entered a weak phase, he said.

“Then the equity market could follow a weak trajectory similar to more typical previous Fed easing cycles rather than the strong trajectory seen during 1995 or 1998,” Panigirtzoglou said.

Other asset classes have mixed reactions. U.S.Treasury have historically rallied, and the curve continued to steepen for up to six months on average after a Fed rate cut. The dollar rallied for up to three months, but eventually tended to give up previous gains, according to the J.P. Morgan analysis.

— CNBC’s Patti Domm and Jeff Cox contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
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Goldman Sachs says the Fed won’t cut rates this year

Goldman Sachs is warning that a growing consensus that the Federal Reserve will cut rates soon is misguided. Chairman Jerome Powell said last week the Fed will “act as appropriate to sustain the expansion, ” which the market interpreted as a signal of rate cuts on the horizon. “A speech from the Chair focused exclusively on longer-term issues at a time of sharply increased worries about trade policy might otherwise have come across as ‘out of touch’ to some market participants,” he added. While


Goldman Sachs is warning that a growing consensus that the Federal Reserve will cut rates soon is misguided. Chairman Jerome Powell said last week the Fed will “act as appropriate to sustain the expansion, ” which the market interpreted as a signal of rate cuts on the horizon. “A speech from the Chair focused exclusively on longer-term issues at a time of sharply increased worries about trade policy might otherwise have come across as ‘out of touch’ to some market participants,” he added. While
Goldman Sachs says the Fed won’t cut rates this year Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: yun li
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Goldman Sachs says the Fed won't cut rates this year

Goldman Sachs is warning that a growing consensus that the Federal Reserve will cut rates soon is misguided.

Chairman Jerome Powell said last week the Fed will “act as appropriate to sustain the expansion, ” which the market interpreted as a signal of rate cuts on the horizon.

“Although it is a close call, we still expect the FOMC to keep the funds rate unchanged in the remainder of the year,” Jan Hatzius, the bank’s chief economist, said in a note on Monday. “In our view, this was not a strong hint of an upcoming cut but was simply meant to provide reassurance that the FOMC is well aware of the risks from the trade war.”

“A speech from the Chair focused exclusively on longer-term issues at a time of sharply increased worries about trade policy might otherwise have come across as ‘out of touch’ to some market participants,” he added.

While Goldman is not buying it, traders are increasingly betting on an easing of monetary policy to make up for the potential trade-war damage. The fed funds futures market is pointing to a nearly 70% chance of a rate cut in July and about 60% probability of three rate cuts this year, according to the CME FedWatch tool.

“We expect Fed officials to be very careful not to deliver an unconditional hawkish message, but to continue emphasizing that they will respond to shocks as needed to attain their mandate,” Hatzius said.


Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: yun li
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India’s central bank is on track for ‘at least one more’ rate cut, JPMorgan says

India’s central bank is on track for at least one, if not more, rate cuts in the near future, J.P. Morgan Chief Emerging Markets Economist Jahangir Aziz said Friday. The RBI cut its policy repo rate, or the rate at which it lends to banks, by 25 basis points (bps) from 6% to 5.75%. The central bank also changed its stance from neutral to an easing bias, otherwise known as an accommodative policy. India’s central bank said in its monetary policy statement that external risks include the ongoing U


India’s central bank is on track for at least one, if not more, rate cuts in the near future, J.P. Morgan Chief Emerging Markets Economist Jahangir Aziz said Friday. The RBI cut its policy repo rate, or the rate at which it lends to banks, by 25 basis points (bps) from 6% to 5.75%. The central bank also changed its stance from neutral to an easing bias, otherwise known as an accommodative policy. India’s central bank said in its monetary policy statement that external risks include the ongoing U
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Company: cnbc, Activity: cnbc, Date: 2019-06-07  Authors: saheli roy choudhury
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India's central bank is on track for 'at least one more' rate cut, JPMorgan says

India’s central bank is on track for at least one, if not more, rate cuts in the near future, J.P. Morgan Chief Emerging Markets Economist Jahangir Aziz said Friday.

The Reserve Bank of India on Thursday slashed interest rates for the third time this year.

The RBI cut its policy repo rate, or the rate at which it lends to banks, by 25 basis points (bps) from 6% to 5.75%. The central bank also changed its stance from neutral to an easing bias, otherwise known as an accommodative policy.

An accommodative policy implies that the central bank is trying to encourage spending by making it cheaper for companies and households to borrow, in a bid to foster growth in the economy.

India’s central bank said in its monetary policy statement that external risks include the ongoing U.S.-China trade war as well as a slowdown in the domestic economy.

“The RBI has shown its easing bias, so whatever data that will come in, the RBI is going to look at it with those lenses,” Aziz told CNBC’s “Squawk Box ” on Friday. “Therefore, our sense is at least one more cut — and maybe more, or more likely more.”

Recent data showed a notable slowdown in growth for the January to March period. With a lower-than-expected 5.8% expansion for the quarter, India fell behind China’s pace of 6.4% for the same period. At the same time, unemployment rate in the country is at a 45-year high.

J.P. Morgan is not the only one expecting more rate cuts in India.

Citi economists wrote in a note on Thursday that the RBI could deliver another rate reduction as early as August, and that the monetary policy committee members now appear to agree on the importance of stimulating growth in a benign inflation environment.

“Although the RBI changed the stance to ‘accommodative,’ we assess that there is room for one more 25bps rate cut in the Aug policy,” they wrote, adding that rate cuts beyond that would depend on the “continuance of low inflation and low growth.”

Meanwhile, ANZ Research economists predicted three more rate cuts of 25 basis points each over the next six months. “Given little room on the fiscal side we expect monetary policy to continue to do the heavy lifting to revive demand,” ANZ economists wrote.


Company: cnbc, Activity: cnbc, Date: 2019-06-07  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, growth, economists, monetary, indias, jpmorgan, rate, cut, policy, wrote, cuts, bank, central, rbi, track


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Gold eyes best week since March 2018 on rate cut views; US jobs data in focus

Gold prices steadied on Friday, but remained on course for their best week since March 2018, after rising expectations for a U.S. rate cut and concerns that trade tussles could hit global growth boosted demand for safe-haven bullion. However, having failed earlier this week to breach its 2019 high of $1,346.73, analysts expect the metal to consolidate until there is fresh impetus. Spot gold was steady at $1,335.27 per ounce at 0902 GMT, while U.S. gold futures were down 0.2% to $1,339.60. Gold h


Gold prices steadied on Friday, but remained on course for their best week since March 2018, after rising expectations for a U.S. rate cut and concerns that trade tussles could hit global growth boosted demand for safe-haven bullion. However, having failed earlier this week to breach its 2019 high of $1,346.73, analysts expect the metal to consolidate until there is fresh impetus. Spot gold was steady at $1,335.27 per ounce at 0902 GMT, while U.S. gold futures were down 0.2% to $1,339.60. Gold h
Gold eyes best week since March 2018 on rate cut views; US jobs data in focus Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-07
Keywords: news, cnbc, companies, higher, best, ounce, trade, views, data, jobs, week, rate, eyes, focus, cut, interest, gold, safehaven, track, market


Gold eyes best week since March 2018 on rate cut views; US jobs data in focus

Gold prices steadied on Friday, but remained on course for their best week since March 2018, after rising expectations for a U.S. rate cut and concerns that trade tussles could hit global growth boosted demand for safe-haven bullion.

However, having failed earlier this week to breach its 2019 high of $1,346.73, analysts expect the metal to consolidate until there is fresh impetus.

Spot gold was steady at $1,335.27 per ounce at 0902 GMT, while U.S. gold futures were down 0.2% to $1,339.60.

“We have had quite a move higher earlier this week, but we are moving towards levels where the market will struggle to go much higher,” ING analyst Warren Patterson said.

Gold has rallied in a short span of time, having gained about 2.3% this week, and is on track for its best seven days since week ending March 23, 2018.

“Overall sentiment is still fairly supportive for the gold market,” Patterson added, attributing the recent price rally to a two-pronged U.S. trade spat with Mexico and China, and hopes of an interest rate cut by the U.S. Federal Reserve.

The United States and Mexico concluded their second day of talks on trade and migration on Thursday and markets rebounded on optimism a deal could be close. However, it remains unclear whether Mexican pledges to curb migration flows will be enough to persuade Washington to postpone tariffs.

U.S. President Donald Trump said he would decide whether to carry out his threat to hit Beijing with tariffs on at least $300 billion in Chinese goods after a meeting of leaders of the world’s largest economies late this month.

Gold’s appeal as a safe-haven investment is bolstered in times of geopolitical uncertainty.

“Gold is likely to stay muted through the rest of the day before the release of the non-farm payrolls. Investors want to see the impact on the U.S. jobs market before reassessing the current pessimism,” Howie Lee, an economist at OCBC Bank, said.

U.S. non-farm payrolls data at 1230 GMT will provide clues on the trajectory of interest rates.

Meanwhile, New York Fed President John Williams on Thursday acknowledged the impact of trade and global growth concerns on business investment, but said he was keeping an open mind on interest rates.

Among other metals, silver rose 0.5% to $14.93 per ounce, on track for its best week since late January.

Platinum edged 0.1% higher to $804.06 an ounce. The metal was headed for its first weekly gain in seven.

Palladium dipped 0.1% to $1,350.75 an ounce.


Company: cnbc, Activity: cnbc, Date: 2019-06-07
Keywords: news, cnbc, companies, higher, best, ounce, trade, views, data, jobs, week, rate, eyes, focus, cut, interest, gold, safehaven, track, market


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Greater China markets struggle for gains even as investors expect the Fed to cut rates

Asia Pacific traded mixed on Thursday as markets in the Greater China region struggled for gains, while South Korea remained shut for a public holiday. The Nikkei 225 in Japan erased earlier gains to finish near flat at 20,774.04 while the Topix index declined 0.34% to 1,524.91. In China, the Shanghai composite fell 1.17% to 2,827.80 and the Shenzhen composite was down 2.08% at 1,463.70. The European Central Bank is set to announce its monetary policy decision on Thursday. Meanwhile, a Reuters p


Asia Pacific traded mixed on Thursday as markets in the Greater China region struggled for gains, while South Korea remained shut for a public holiday. The Nikkei 225 in Japan erased earlier gains to finish near flat at 20,774.04 while the Topix index declined 0.34% to 1,524.91. In China, the Shanghai composite fell 1.17% to 2,827.80 and the Shenzhen composite was down 2.08% at 1,463.70. The European Central Bank is set to announce its monetary policy decision on Thursday. Meanwhile, a Reuters p
Greater China markets struggle for gains even as investors expect the Fed to cut rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-06  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, traded, expect, markets, central, struggle, rates, cut, ecb, gains, fed, investors, china, wrote, trump, mexico, greater, bank


Greater China markets struggle for gains even as investors expect the Fed to cut rates

Asia Pacific traded mixed on Thursday as markets in the Greater China region struggled for gains, while South Korea remained shut for a public holiday.

The session followed overnight gains on Wall Street where investors grew more confident that the U.S. Federal Reserve may slash interest rates this year to support an economy affected by the ongoing trade war.

The Nikkei 225 in Japan erased earlier gains to finish near flat at 20,774.04 while the Topix index declined 0.34% to 1,524.91.

Australia’s ASX 200 rose 0.39% to 6,383 as most sectors traded up. The heavily weighted financial subindex rose 0.6% as major banking stocks gained.

In China, the Shanghai composite fell 1.17% to 2,827.80 and the Shenzhen composite was down 2.08% at 1,463.70. Taiwan’s Taiex fell 0.5% to 10,409.20 while Hong Kong’s Hang Seng index was fractionally higher in the final hour of trade.

India’s Nifty 50 was down 0.95% and the Sensex lost about 0.69%.

Analysts said that markets were already beginning to price in the possibility of rate cuts after Fed Chair Jerome Powell said the U.S. central bank will keep an eye on developments in the domestic economy, and would do what it must to “sustain the expansion. ”

“US markets firmed slightly overnight on the anticipation of rate cuts and news that President (Donald) Trump wants a deal with Mexico, although little progress was made,” analysts at ANZ Research wrote in a morning note.

The U.S. and Mexico failed to reach a deal on immigration issues during a Wednesday meeting, just days before 5% tariffs on all Mexican imports are set to kick in. Trump announced those duties in a surprise tweet last week, saying they would be imposed “until such time as illegal migrants coming through Mexico, and into our Country, STOP.”

Strategists at Singapore’s DBS Bank pointed out in a note that Fed’s comments over the past several days have turned “notably more dovish as uncertainties over the US’s trade policies weigh.”

“With the Fed seen succumbing to the aggressive easing priced into the rates space, attention will shift to the European Central Bank (ECB) today,” the DBS strategists wrote, adding the ECB has a “lot less room” on policy easing than the U.S. central bank.

The European Central Bank is set to announce its monetary policy decision on Thursday. Meanwhile, a Reuters poll found that economists believe the ECB has no prospect of raising interest rates through to the end of 2020.


Company: cnbc, Activity: cnbc, Date: 2019-06-06  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, traded, expect, markets, central, struggle, rates, cut, ecb, gains, fed, investors, china, wrote, trump, mexico, greater, bank


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