The People’s Bank of China trimmed the 1-year loan prime rate to 3.0% from 3.1%, and the 5-year LPR to 3.5% from 3.6%.
A slew of state-backed commercial lenders moved to cut their deposit rates by as much as 25 basis points earlier Tuesday. As mentioned by Mo El Erian, the question remains: will this prolonged period of policy incrementalism reach a critical mass that fundamentally alters household sentiment and consumer behaviour? So far, it has failed to do so. Source: Bloomberg, CNBC
The number of Fed rate cuts continue to be revised downwards:
* June 18 (red) now 8% (92% no move) * July 30 (green) now 35% (65% no move) No cut is priced until September 17. And even that cut (blue) is disappearing. It was more than 100% ~10 days ago and is now 66% (34% no move) and continuing to fall. Source: Jim Bianco @biancoresearch
As expected, BoE cut rates by 25bps! (5-4 vote).
It came as Donald Trump hinted a UK-US trade pact was imminent. Some MIXED SIGNALS - Two members (Swati Dhingra and Alan Taylor) preferred to reduce Bank Rate by 0.5 percentage points, to 4%. Two members (Catherine L Mann and Huw Pill) preferred to leave Bank Rate unchanged, at 4.5%.
Fed leaves rates unchanged, as expected
“The committee … judges that the risks of higher unemployment and higher inflation have risen.” Powell is facing the worst outcome for a Fed President... The Federal Reserve's dual mandate is to promote two main economic goals: maximum employment and price stability... and uncertainty is on both sides How will President Trump react to this? ECB is cutting rates. PBOC as well as they see a disinflationary shock coming. Meanwhile, the Fed stays put. He is not going to like this...
A currency's reserve status should not be taken for granted.
Just look at what happened to the pound... Source: Augur Infinity
Should investors look at overbought signals on gold or focus on the long-term perspective?
Tavi Costa believes that when it comes to the yellow metal this as one of those key moments when traditional technical analysis like overbought conditions become largely irrelevant. We are likely in the midst of a monetary realignment, and attempting to time short-term corrections based on extreme RSI levels misses the forest for the trees, in his view. "This perspective underestimates the structural macro imbalances that continue to compel governments to accumulate gold" he added. He might be right...
President Trump’s reaction to what Fed Chair Powell said yesterday.
"‘termination cannot come fast enough"
🔴 BREAKING:
THE ECB CUTS INTEREST RATES BY 0.25% for seventh time in a year ▶️ The European Central Bank made yet another 25-basis-point interest rate cut on Thursday as global tariff turmoil has created widespread uncertainty and spurred fears about the euro zone’s economic growth. ▶️ A rate cut was fully anticipated by markets, with an around 94% chance of a 25-basis-point trim being priced in ahead of the decision, according to LSEG data. ▶️ The cut takes the ECB’s deposit facility rate, its key rate, to 2.25%. At its highs in mid-2023 it had been at 4%. ▶️ Tariff developments in recent weeks are widely seen by analysts and economists as a key reason for the ECB to cut interest rates. Even though many of the initial duties imposed by the U.S., as well as retaliation measures, have been put on ice or eased, fears about how they could affect economic growth have been rife. ▶️ In its policy statement, the ECB said that the “outlook for growth has deteriorated owing to rising trade tensions.” ▶️ It added, “Increased uncertainty is likely to reduce confidence among households and firms, and the adverse and volatile market response to the trade tensions is likely to have a tightening impact on financing conditions.” Source: Yahoo Finance, CNBC
