Many Central Banks Meet — Most Retain Existing Policy Stances

May 8, 2014

Central banks in Malaysia, Indonesia, Norway, and the Philippines left key interest rates unchanged at 3.0%, 7.5%, 1.5% and and 3.5%, respectively.  All these actions were as expected.  The National Bank of Serbia, in contrast, cut its key policy interest rate to 9.0% from 9.5%.  Next up is the Bank of England, then the ECB and finally the Central Reserve Bank of Peru, which likewise should opt for the status quo.

The dollar is softer, with losses of 0.6% against the Australian and New Zealand dollars, 0.3% relative to the Swiss franc, 0.2% vis-a-vis the euro, and 0.1% versus the yen, loonie and sterling.

Equities are higher for the most part.  Japan’s Nikkei closed 0.9%, and other Pacific Rim markets went up 0.8% in Australia, 0.6% in South Korea and 0.4% in Singapore and Taiwan.   But New Zealand and China fell by 0.5% and 0.1%.  In Europe, equities show gains of 1.5% in Italy, 0.9% in spain, 0.6% in France, 0.5% in Germany and Switzerland and 0.4% in Britain.

The ten-year British gilt and Japanese JGB yields firmed two and one basis points.  The German bund is steady.

Gold and oil are higher, too, at $1,292.30 per ounce and $100.55 per barrel of West Texas Intermediate.

China”s April trade report evoked relief in the market with the largest surplus ($18.45) since January and unexpectedly positive on-year export growth of 0.9% after drops of 18.1% in February and 6.6% in March.

German industrial production slipped 0.5% on month in March and posted a 12-month advance of 3.0%, down from 4.7% in the year to February.

Australian labor statistics were better than assumed, boosting the Aussie dollar to a 2-week high.  The jobless rate held at 5.8%, and jobs rose by 14.2K, all of which being full-time positions.

The British Halifax house price index slid 0.5% in March and was 8.5% higher than a year earlier in the first quarter.

This Just InThe Bank of England as expected left its key interest rate at 0.5% and its asset purchase program’s size at GBP 375 billion as expected.

Spanish industrial output was 0.6% greater in March than a year earlier.  Irish consumer prices ticked up 0.1% in April and was a mere 0.3% above the year-earlier level.  Norwegian industrial production recorded gains in March of 2.3% from February and 7.1% from March 2013.  Dutch CPI inflation accelerated from 0.8% in March to 1.2% in April.  Greek unemployment was at 26.5% in February.

Today’s main focus will be ECB President Draghi’s press conference starting at 12:30 GMT.  In the U.S., weekly jobless insurance claims get released, and Fed officials Evans and Tarullo speak publicly.  Canada reports house prices.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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