Bloomberg 8/1/2024
*BANK OF ENGLAND CUTS KEY INTEREST RATE A QUARTER-POINT TO 5%
Traders bet on 24bps of further cuts by November and 38bps by year-end, compared with 16bps and 31bps ahead of the the BOE’s decision Thursday.

Benzinga Newswire 7/31/2024
Fed's Powell Says Asked About September Cut Again, Says If Inflation Moves Down In Line With Expectations, Growth Remains Reasonably Strong, Labor Market Remains As It Is, Rate Cut In September Would Be On Table

BBG 7/31/2024
*POWELL: 50 BPS CUT NOT SOMETHING WE'RE THINKING ABOUT NOW

Benzinga Newswire 7/31/2024
Fed's Powell Says Chances Of Hard Landing Are Now; Economy Is Neither Overheating Nor Sharply Weakening; We Must Be Humble About Giving Forward Guidance; Nobody Has Great Vision Deep Into The Future

BEIJING (AP) 07/28/2024

Italy and China signed a three-year action plan on Sunday to implement past agreements and experiment with new forms of cooperation, Italy’s Prime Minister Giorgia Meloni said on an official visit to the Chinese capital.
Meloni is trying to reset relations with China as fears of a trade war with the European Union are interwoven with continued interest in attracting Chinese investment in auto manufacturing and other sectors.

Meloni told the business leaders that the two sides had signed an industrial collaboration memorandum that includes electric vehicles and renewable energy, which she described as “sectors where China has already been operating on the technological frontier for some time ... and is sharing the new frontiers of knowledge with partners.”


Bloomberg 07/29/2024

President Xi Jinping is stepping up efforts to position himself as a peacemaker for ending Russia’s war in
Ukraine, despite growing criticisms from the US and Europe that Beijing is propping up the Kremlin’s battlefield efforts.
With both Moscow and Kyiv facing pressure at home and abroad to find a way to end the war, China last week hosted its
first senior official from Ukraine since the conflict began in 2022. While Foreign Minister Wang Yi told his Ukrainian
counterpart Dmytro Kuleba the time was “not yet ripe” for peace talks, he said both sides were signaling a willingness to
negotiate.

Beijing followed up that outreach on Sunday by dispatching
its special envoy Li Hui to Brazil, South Africa and Indonesia
to “build up conditions to resume peace talks” — countries that
have also skipped imposing US-led sanctions on Russia.
The flurry of activity underscores Xi’s ambition to forge a
bigger diplomatic role at a time when Kyiv — and the broader
European region — are bracing for a dramatic shift in foreign
policy from their most important ally.

Bloomberg 8/16/2024
Chinese carmarkers are planning to build
factories in Europe, according to the Shanghai Securities News.
* Dongfeng Automobile is in contact with the Italian government
about investing to build a factory

Japan Times 7/31/2024

The Bank of Japan raised rates Wednesday in a surprising and aggressive move that caught the market off guard, delivering a one-two punch of a rate change and a reduction in bond purchases that a week ago was considered highly unlikely.
At its two-day policy meeting, the BOJ voted to increase its short-term policy rate target to 0.25% from a range of 0% to 0.1%. It also said that it would reduce its buying of government bonds through March 2026.
An institution that had recently earned a reputation for being wishy-washy and making missteps instead acted decisively and with resolve.
Just days before, the vast majority of analysts polled forecast that the central bank would remain dovish and leave rates unchanged until September or October in order to gather more data.

Barrons 8/1/24
Federal Reserve Jerome Powell said Wednesday that bank officials are very aware of the risks of starting rate cuts too soon and the risk of going too late—and had a robust conversation during this week’s meeting on that very point.
“There was a real discussion back and forth of what the case would be for moving [on rate cuts] at this meeting,” Powell said. “The overall sense of the committee, as I mentioned, is that we're getting closer to the point at which it will be appropriate to begin to dial back restriction. We're not at the point yet. We want to see more good data.”
He reiterated that the decision to keep interest rates steady at this week’s policy meeting was unanimous.


...Bloomberg 8/2/24 The bond-market rally escalated Friday after a report showed that job growth slowed sharply last month, further stoking speculation that the Federal Reserve will start aggressively cutting interest rates to keep the economy from stalling.
The policy-sensitive two-year Treasury yield tumbled as much as 31 basis points to 3.84%, the lowest since May 2023, before paring the drop. Rates on Treasuries of all maturities declined, with the benchmark 10-year yield sliding 15 basis points to about 3.82%.
The employment figures — which showed job growth slowed to 114,000 in July from 179,000 a month earlier — kindled concerns that the US economy is at risk of a moving toward a recession.

Bloomberg 7/24/2024

The Bank of Canada cut interest rates by a quarter percentage point for a second consecutive meeting and signaled further easing ahead as inflation worries wane.
Policymakers led by Governor Tiff Macklem lowered the benchmark overnight rate to 4.5% on Wednesday, as widely expected by markets and economists in a Bloomberg survey. Officials see below-potential growth continuing to cool inflation, and said they’re spending more time discussing economic headwinds.
“With the target in sight and more excess supply in the economy, the downside risks are taking on increased weight in our monetary policy deliberations,” Macklem said in prepared remarks.
Macklem reiterated that it’s “reasonable” to expect further interest rate cuts, and that the bank will be taking its decisions “one at a time,” pushing back on expectations that the bank is on a predetermined cutting path.

Bloomberg 8/6/2024

Australia’s central bank kept interest rates at a 12-year high and all-but ruled out a rate cut in the next six months, splitting with global counterparts as it waits for inflation to abate.

Bloomberg 7/31/2024

Australia’s core inflation unexpectedly decelerated last quarter, supporting the Reserve Bank’s view
that prices will gradually ease and prompting traders to boost bets on an interest-rate cut. The currency and bond yields
dropped.

The closely-watched trimmed mean core measure, which smooths out volatile items, climbed 3.9% in the second quarter
from 4% three months earlier, data from the Australian Bureau of Statistics showed Wednesday. The consumer price index advanced
3.8% in the three months through June from a year earlier, matching estimates.

The currency fell as much as 0.8% and yields on policy sensitive three-year government bonds declined 18 basis points,
while stocks rallied. Traders scaled back bets on a rate hike at the RBA’s meeting next week and are now pricing a 50% chance of
a cut in December.

Bloomberg 8/2/2024

The bond-market rally escalated Friday after a report showed that job growth slowed sharply last month, further stoking speculation that the Federal Reserve will start aggressively cutting interest rates to keep the economy from stalling.
The policy-sensitive two-year Treasury yield tumbled as much as 31 basis points to 3.84%, the lowest since May 2023, before paring the drop. Rates on Treasuries of all maturities declined, with the benchmark 10-year yield sliding 15 basis points to about 3.82%.
The employment figures — which showed job growth slowed to 114,000 in July from 179,000 a month earlier — kindled concerns that the US economy is at risk of a moving toward a recession.
That drove futures traders to price in expectations that the US central bank will cut its benchmark rate by a full percentage point by the end of the year. With just three meetings left, that shows anticipation that the Fed will make an unusually large half-point move at one of the gatherings or act between its scheduled meetings — signaling that policymakers will start moving rapidly to bolster growth.

Bloomberg 8/1/2024
The Bank of England cut interest rates for
the first time since early 2020 and signaled further cautious
reductions ahead, offering some relief to households after a
year of the UK’s highest borrowing costs for a generation.
Governor Andrew Bailey’s casting vote clinched the quarter-
point drop in the benchmark to 5%. The decision was “finely
balanced” for some of those supporting the move, and opposed by
a minority of four on the nine-member Monetary Policy Committee,
according to minutes of the meeting.

Bloomberg 7/23/2024
Below are the key takeaways from the live blog event "Bank of Japan Monetary Policy Decision", followed by a complete transcript of blog entries in the order they were originally posted.
07/31 04:20 ET
Thanks for joining us today for the BOJ’s monetary policy decision. Here are five key takeaways:
The BOJ hiked interest rates by 15 basis points to 0.25%, saying that inflation is on track. A majority of economists had expected no change to rates.
The central bank also unveiled plans to reduce its monthly pace of bond buying to around ¥3 trillion by the first quarter of 2026. Overall, its government bond holdings are set to drop by 7% to 8% in about two years.
Governor Ueda signaled the bank will continue to raise rates going forward while adding any move will be data-dependent. He also denied that 0.5% is any kind of a rate limit.

Bloomberg 6/21/24
Japanese Prime Minister Fumio Kishida
announced extra utility assistance and an extension of gasoline
subsidies to help households cope with inflation.
Subsidies for power bills are to start in August and stay
in place for three months, Kishida said at a news conference
Friday, adding existing gasoline subsidies would be extended
until the end of this year

Bloomberg 6/17/24

French stocks clawed back some losses and
bonds steadied as traders weighed assurances from far-right
leader Marine Le Pen that she’d work with President Emmanuel
Macron should she prevail in national elections later this
month.

France’s CAC 40 benchmark bounced 0.2% higher by late
morning, after tumbling last week to the lowest since January.
The moves helped lift the main European stock measure, while
French government bond yields steadied across the curve. In a
broader sign that last week’s risk-off sentiment was easing, the
Italian 10-year bond spread over Germany retreated.
Traders are seizing on Le Pen’s appeal to moderates and
investors that she won’t try to push Macron out. On Monday,
European Central Bank Chief Economist Philip Lane said policy
makers see no reason to be overly concerned about the financial
turbulence in France. Concern about the nation’s political
volatility spurred a flight to haven assets last week while
wiping out $258 billion from the market capitalization of the
country’s stocks.

Bloomberg 6/14/24

The Bank of Japan is making investors wait until its July meeting for details on its paring of bond buying, sparking renewed weakness in the yen.

Traders were surprised by the BOJ’s decision on Friday to flag a cut in debt purchases without laying out any figures or timeline. That’s being seen as a delay in the normalization of policy, given that more than half of economists surveyed by Bloomberg had expected the central bank to begin cutting its purchases.

Friday’s announcement that the benchmark rate will remain in a range between 0% and 0.1% was in line with consensus.

The yen slumped versus the dollar to its lowest level since April, before trimming its decline, while benchmark 10-year government bonds rose, sending yields lower. Swaps markets pricing showed traders reducing bets for a rate hike next month. Japanese stocks closed 0.5% higher, defying a broader decline in Asian equities.

Bloomberg 6/13/24
China is working towards raising tariffs on large engine vehicles, in retaliation against EU’s plan to raise tariffs on electric vehicles from the Asian nation, according to a post by Yuyuantantian WeChat account, which is affiliated with China Central Television.
• The report, which cites an unidentified person, doesn’t offer any timetable or other details of the planned retaliation
• China is also expected to make an announcement before end-August over European brandy imports after an anti-dumping probe started in January, the report says

Bloomberg 6/13/24
China’s pork industry has the right to file
investigation application to maintain normal market competition
order and defend their own legitimate rights and interests,
Chinese Commerce Ministry’s spokesman He Yadong says in a
regular briefing, in response to questions on dumping probe of
EU pork.

FOMC Press Conference 6/12/24
So far this year, the data have not given us that greater confidence. The most recent inflation readings have been more favorable than earlier in the year however and there has been modest further progress toward our inflation objective. We'll need to see more good data to bolster our confidence that inflation is moving sustainably toward 2%.

6/18/24 Dow Jones

The Reserve Bank of Australia continued to warn about
ongoing inflation risks at its policy meeting on Tuesday, leaving open the
potential for a further interest-rate increase if price pressures remain
stubbornly high over coming months.

As expected, the board of the RBA chose to keep the official cash rate steady
at 4.35%, where it has sat since November.

"Inflation is easing but has been doing so more slowly than previously
expected and it remains high," the RBA's policy-setting board said in a
statement.

"The board expects that it will be some time yet before inflation is
sustainably in the target range. While recent data have been mixed, they have
reinforced the need to remain vigilant to upside risks to inflation," it
added.

"The board is not ruling anything in or out," according to the statement.

The commentary suggests the RBA remains extremely cautious about Australia's
inflation outlook and that second-quarter inflation data due out at the end of
July has the potential to trigger a further tightening of policy.

Bloomberg 6/20/2024
The Bank of England hinted that more policymakers may be close to backing interest rate cuts, keeping alive hopes of a loosening by the end of the summer. The UK central bank left its benchmark lending rate on hold at a 16-year high of 5.25% on Thursday. But minutes of the meeting said the decision not to cut rates was “finely balanced” for some of the nine members of the Monetary Policy Committee. Traders saw the statement as a signal that the BOE was willing to cut in coming months and moved to price more than a
50% chance of a reduction in August, from 32% before the meeting. Markets also increased the amount of easing expected for the year to 48 basis points from 43 basis points previously.

BBG 5/22/2024
“If the data were to continue softening throughout the next
three to five months, you can even think about doing it at the
end of this year,” Waller said on CNBC Tuesday. “If we get
enough data going the right way, then we can think about cutting
rates later this year, beginning of next year.”
Waller’s comments about the rate outlook follow those made
earlier Tuesday at the Peterson Institute for International
Economics, where he said he needs to see “several more” good
inflation numbers to begin interest-rate cuts.
He noted April consumer price figures were a reassuring
signal price pressures are not accelerating and suggest progress
toward the central bank’s 2% goal has likely resumed.
“In the absence of a significant weakening in the labor
market, I need to see several more months of good inflation data
before I would be comfortable supporting an easing in the stance
of monetary policy,” Waller said at the Peterson Institute for
International Economics.

BBG 5/22/24
“If the data were to continue softening throughout the next
three to five months, you can even think about doing it at the
end of this year,” Waller said on CNBC Tuesday. “If we get
enough data going the right way, then we can think about cutting
rates later this year, beginning of next year.”

Reuters 5/22/2024

The European Central Bank should not necessarily follow up a rate cut in June with another move the following month, even if inflation is on its way to target, Bundesbank President Joachim Nagel said in a newspaper interview published on Tuesday.
The ECB has all but promised a rate cut on June 6, so policymakers have shifted their attention to debating where rates will go thereafter.
While some are advocating for further cuts, others including board member Isabel Schnabel, Belgium's Pierre Wunsch, the Netherlands' Klaas Knot and Latvia's Martins Kazaks have suggested that a second cut in July may be premature.
"If rates are lowered for the first time in June, that does not mean we will cut rates further in subsequent Governing Council meetings," Nagel said during a joint interview with Germany's Handelsblatt, France's Les Echos, Italy's Corriere della Sera and Spain's El Mundo. "We are not on auto-pilot."