FOMC Day
April 29, 2015
Two central banks eased monetary policy earlier today. The Swedish Riksbank expanded quantitative stimulus, kept a negative 0.25% repo rate, indicated that such could go lower, and warned that a variety of other measures may be taken to ensure that inflation recovers to target. The repo rate is projected to be no higher than 0.8% three years from now. The Bank of Thailand cut its policy interest rate by 25 basis points to 1.50%, lowest since mid-2010. This unexpected move follows a similar 25-basis point rate cut in March.
The FOMC winds up a two-day policy meeting. A statement will be released this afternoon, but no press conference is planned. A Brazilian interest rate decision will also be revealed today.
Progress was made in restoring quieter conditions on the streets of Baltimore. Not so in Burundi.
The first preliminary estimate of U.S. GDP last quarter also is due, as is the employee cost index and pending home sales.
Japan was closed for Showa Day, the first of that country’s Golden Week holidays.
Eurozone sentiment and money/credit growth data were reported.
- The economic sentiment index slid 0.2 points to a 2-month low of 103.7 in April. Consumer confidence (-4.6) was unrevised from the preliminary estimate but below March’s -3.7. Industrial confidence also weakened to a 2-month low. Construction fell to a 7-month low. Service sector confidence went up, however.
- On-year M3 growth accelerated to 4.6% in March from 4.0% in February and 3.7% in January, thus averaging 4.1% in the first quarter. All of the acceleration reflected stronger expansion of M1 money. Loans to the private sector were only 0.1% greater than a year earlier. Mortgage lending firmed 0.2% on year, but loans to corporations posted a 0.6% drop.
Britain’s Nationwide house price index rose 1.0% in April and was 5.2% greater than a year earlier, up from 5.1% in March but down from 7.2% in the year to December 2014.
The CBI survey of U.K. distributive trades deteriorated to a reading in April of +12 versus +18 in March.
Austria’s purchasing managers index in manufacturing printed at an 8-month high of 50.1 in April after averaging 48.2 in 1Q15. It was above the 50 no change level for the first time since last August.
The Swiss UBS consumption indicator rose 0.14 points to a reading of 1.35 in March.
Consumer sentiment in China fell 3.6 points to a reading of 111.1 in April. Singaporean producer prices were 8.9% lower than a year before in March. Business sentiment improved in South Korea this month for both manufacturers and non-manufacturers.
The dollar slid overnight by 0.2% against the Swissie, euro, and sterling. The greenback is up 0.4% relative to the Aussie dollar, 0.3% against the yen and kiwi, and 0.2 vis-a-vis the loonie.
Share prices fell by 2.6% in Indonesia, 1.0% in Taiwan, 1.9% in Australia, 0.6% in India and 0.5% in New Zealand but rose 0.7% in China. European markets are mostly lower, but Greek stocks have recovered another 0.5%.
Gold and oil are down 0.7% at $1,205.60 per ounce and $56.68 per barrel.
The 10-year British gilt yield climbed six basis points, while its German and Japanese counterparts stayed unchanged.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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