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The European Commission is providing €540 million in financial aid and support to help farmers address fertilizer issues.June 12th - Data from the Peoples Bank of China shows that loan interest rates remained low in May. The weighted average interest rate for newly issued corporate loans (domestic and foreign currencies) in May was approximately 3.0%, about 25 basis points lower than the same period last year. Data shows that since the second half of 2018, my country has lowered the reserve requirement ratio 18 times, providing sustained medium- and long-term liquidity to the market and playing a role in the banking system and financial markets. Compared to the high point since the beginning of this interest rate cut cycle in the second half of 2018, policy interest rates have been lowered 10 times, accumulating a reduction of 1.15 percentage points. Experts have stated that in recent years, measures such as rectifying banks irregular manual interest payment practices, guiding non-bank interbank demand deposit rates to follow policy interest rate adjustments, and supporting banks in stabilizing net interest margins have facilitated the transmission of interest rate policies. Overall, my countrys policy interest rates are effectively transmitted, and loan interest rates have remained stable with a slight downward trend, staying at a low level.On June 12, the Peoples Bank of China (PBOC) issued a notice soliciting public opinions on the "Administrative Measures for Large-Denomination Certificates of Deposit." The Measures, comprising 24 articles, specifically stipulate the scope of issuers and investors of large-denomination certificates of deposit, the elements of the certificates, issuance preparation, management of each stage of issuance and maturity, information disclosure, and supervision. Key revisions include: clarifying supervision requirements and measures. First, it clarifies that the pricing of all relevant business stages of large-denomination certificates of deposit should comply with the interest calculation and settlement rules issued by the PBOC and be included in self-regulatory management. Second, it clarifies that if an issuer fails to fulfill its information disclosure obligations as described in these Measures, or violates regulations regarding issuance, trading, transfer, early withdrawal, and redemption, the PBOC will impose penalties in accordance with the "Law of the Peoples Republic of China on the Peoples Bank of China" and other relevant laws and regulations. Third, it clarifies the responsibilities of the Interbank Funding Center and the Interbank Market Clearing House to summarize business information monthly and report it to the PBOC.On June 12, the Peoples Bank of China (PBOC) released a draft explanation of the "Measures for the Administration of Large-Denomination Certificates of Deposit (Draft for Public Comment)," which states that the "Measures" reserve policy space for the future development of large-denomination certificates of deposit. It adds the repurchase rate (DR) of bonds held by deposit-taking financial institutions or other rates recognized by the PBOC as a reference benchmark for the interest calculation of floating-rate certificates of deposit, thus enriching the pricing reference indicators for large-denomination certificates of deposit.The Hungarian forint rose 0.8% against the euro to 352.15, its highest level since September 2021.

US Dollar Index Recovers From Weekly Low Due To Weak US Inflation And Hawkish Federal Reserve Bets

Daniel Rogers

Feb 15, 2023 14:41

US Dollar Index.png 

 

During early Wednesday trade, the US Dollar Index (DXY) maintains a defensive stance at 103.30, following a comeback from a one-week low, as dollar bulls await fresh evidence to reverse a two-day decline.

 

US inflation numbers initially failed to excite US Dollar bulls, forcing the dollar's index against six major currencies to drop to its lowest level in a week the previous day. The US Treasury bond yield and the DXY, however, were later buoyed by the Fed's hawkish remarks.

 

The US Consumer Price Index (CPI) exceeded market expectations with a 6.4% year-over-year (YoY) increase, although it was the worst YoY growth since 2021, when it fell below 6.5%. Importantly, the CPI excluding food and energy, often known as the Core CPI, rose by 5.6% compared to market forecasts of 5.5% and prior readings of 5.5%.

 

In spite of the fact that the United States inflation failed to meet expectations for a "pleasant surprise," the majority of Federal Reserve (Fed) policymakers supported more rate hikes after reviewing the data. The yields on US Treasury bonds and the US Dollar were driven by the same factor. Lorie Logan, president of the Dallas Fed, highlighted, however, that they must be prepared to continue rate hikes for a longer period of time than initially anticipated. John Williams, president of the New York Federal Reserve Bank, reiterated this attitude, noting that the task of containing high inflation is not yet accomplished. In addition, the president of the Federal Reserve Bank of Philadelphia, Patrick Harker, stated that they are not yet through (increasing interest rates), but are likely close.

 

As a result, US 10-year Treasury bond rates vary around 3.75%, up three basis points (bps) after reaching a six-week high, while the two-year equivalent reached its highest level since early November 2022 by reaching 4.60%. Similarly, Wall Street's losses towards the conclusion of the day boosted the DXY's increase.

 

US Retail Sales and Industrial Production data for January, as well as the NY Empire State Manufacturing Index for February, should be closely monitored by traders of the US Dollar Index on Wednesday in order to validate the Fed's hawkish lean and continue the recovery's momentum.


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