Next Week’s Menu: June 8-14, 2024 June 7, 2024 Central Banks: An FOMC meeting with updated U.S. macroeconomic forecasts and followed by Chairman Powell’s press conference heads up a menu of scheduled monetary policy reviews that also includes central banks in Japan, Taiwan, Thailand, Armenia, Pakistan, Serbia and Peru. Williams and Goolsbee of the Federal…
Tight Labor Market Likely to Delay Fed Rate Cut Further June 7, 2024 The 272 thousand increase last month in U.S. non-farm payroll employment exceeded market expectations by nearly 50% and comes on top of 238k per month job growth in the prior two months. Job growth per se needed delay a rate cut, but…
Bank of Russia Gearing Up for Possible Further Rate Hike June 7, 2024 The Bank of Russia, where officials left the interest rate benchmark today unchanged at 16.0% and delivered the following warning after today’s policy review: Growth in domestic demand is still outstripping the capabilities to expand the supply of goods and services. The Bank of Russia holds open the prospect of increasing the key rate at its upcoming…
Monetary Policy Announcements from India and Russia and Awaiting U.S. Jobs Report June 7, 2024 The dollar marked time overnight and is currently unchanged against the euro and Swissy, down 0.1% relative to sterling and the yen but up 0.1% vis-a-vis the Canadian and Australian dollars. The Mexican peso extended yesterday’s rebound. U.S. stock futures…
ECB Rate Cut Aligned With Market Expectations and Balanced by Explicit Non-Commitment to Any Particular Future Path In Rates June 6, 2024 The ECB’s first interest rate cut since 2016 was by just 25 basis points and clearly telegraphed to market participants in advance. The refinancing rate had been lifted from zero percent sustained for…
Europe Commanding the Spotlight June 6, 2024 Today’s 80th anniversary of the D-Day assault on Normandy Beaches finds Continental Europe at another crossroads. Allied defenders of democracy have struggled to maintain a cohesive response to the challenges posed by the axis of Russia, China and Iran as well as the troubling war between Israel and…
Bank of Canada Rate Cut June 5, 2024 The Bank of Canada’s policy interest rate of 5.0% since July 2023 has been cut to 4.75% in a move to lessen the degree of policy restraint. However, balance sheet normalization is to continue, and the released statement notably does not commit to any particular timetable of…
Another Sign of Cooler U.S. Growth, Which Isn’t an Entirely Unwelcome Thing June 5, 2024 ADP’s monthly calculation of U.S. private-sector employment growth rose by a less-than-anticipated 152k last month. That constitutes the smallest gain since +111k in January. Composite and service-sector purchasing manager readings for the euro area in May of 52.2 (a one-year…
Growth Concerns and An Indian Election that Didn’t Pan Out Quite As Expected June 4, 2024 Yesterday’s May U.S. factory PMI release from the Institute of Supply Management surprised investors with a 3-month low 48.7 overall reading and a 7-month low score of 45.4 in new demand. In conjunction with last Thursday’s downward revision of…
Markets Waiting for the Proverbial Godot, I.E. Fed Easing May 28, 2024 I found the market’s initially upbeat reaction to Fed Chairman Powell’s May 1st press conference puzzling and dismaying and in my opening post the following day wrote Investors had a somewhat more comforting reaction to Fed Chairman Powell’s press conference than I, fixating…