RBA Delivered a Mildly Dovish Tone as it Extended TFF and Hinted Further Easing
As widely anticipated, RBA left the cash rate and the 3-year bond yield target unchanged at record of 0.25% at today’s meeting. Yet, the decision to expand the size of Term Funding Facility (TFF) and the tone in the accompanying...
RBA Preview – Keeping Expansionary Policy Stance with Focus on 3-Year Yield
We expect RBA would leave the monetary policy unchanged in September. Since March, RBA has been adopting a number of measures to lower the borrowing costs and provide liquidity to the market. These include keeping the cash rate at record...
Powell Announced Dovish Shift to Fed’s Monetary Policy, Targeting Averaging Inflation and shortfall of Maximum Employment
At the annual Jackson Hole Symposium, Fed Chair Powell briefed the market on the results of the Fed’s strategic review of its monetary policy strategy. Powell announced the new approach to deal with price stability and maximum employment, the dual...
Fiscal Stalemate to Lead to More Fed Stimulus and Further USD Weakness
We expect US dollar’s downtrend to resume downtrend in coming months after consolidation. Fiscal stalemate suggests that the Fed would shoulder more burdens in delivering stimulus. This should lead yields to decline further, supporting weakness in the greenback. Stalled Hopes...
FOMC Minutes Revealed Rigorous Debate over Alternative Monetary Policy Tools
The FOMC minutes for the July meeting revealed that the members remained concerned about the outlook of economic recovery. They had discussed a number of tools for further easing, including forward guidance, asset purchases, and yield curve targets. Meanwhile, the...
AUDNZD’s Rally on Yield Differential Looks Overextended
Recent strength in Australian dollar has sent AUDNZD to the highest level in 2 years. Notwithstanding the second wave of coronavirus outbreak, and the renewed lockdown measures, in Victoria, Aussie has remained firm. While all major currencies have appreciated in...
RBNZ Preview: Expect QE Size Expansion and More Discussion on Negative Rates
We expect RBNZ to leave the OCR unchanged at 0.25% this week. It will likely increase the size of the Large-Scale Asset Purchase (LSAP) Program (QE) to NZD 80-90B from the current NZD 60B. The accompanying statement would contain a...
RBA Cautioned over Uneven and Bumpy Recovery amidst Second Wave of Outbreak. Maintained All Easing Measures
At the July meeting, RBA left the cash rate unchanged at 0.25% and maintained yield curve targeting for 3-year bonds at 0.25%. While acknowledging that economic contraction has been less severe than previously anticipated, policymakers left economic forecasts largely intact....
BOE Preview – Expecting More Hint on Lowering ELB while Near-Term Outlook Might be Upgraded
BOE is widely anticipated to leave the Bank rate unchanged at record low of 0.1% this week. The asset purchase program (QE) will also be maintained at 745B pound. Of most interest in the meeting are the updated economic assessments,...
RBA to Caution about Economic Impacts of Renewed Lockdown, Relying on Fiscal Policy for Stimulus
RBA will most likely leave all of its monetary policy measures unchanged in August.The cash rate will stay on hold at 0.25%, the yield curve control program remains targeting 3-year government bonds at 0.25% and the Term Funding Facility will...