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Iranian Parliament Speaker Ghalibaf: A bilateral ceasefire or negotiations is unreasonable.A spokesperson for the UAE Ministry of Foreign Affairs stated that they will seek clarification regarding the terms of the ceasefire agreement between the United States and Iran.On April 9th, Federal Reserve officials weighed different scenarios for the U.S. economy following the outbreak of war with Iran, including scenarios requiring interest rate cuts and scenarios potentially requiring rate hikes. The minutes of the March FOMC meeting, released Wednesday, showed that most officials were concerned that the war could impact the labor market, necessitating lower interest rates. At the same time, many officials also emphasized the risks of inflation, which could ultimately require a rate hike. The minutes showed that an increasing number of officials recommended including related wording in the post-meeting statement, mentioning the possibility of a rate hike under certain conditions. The minutes stated: "Some participants believed that there were good reasons to include a two-way description of future interest rate decisions in the post-meeting statement to reflect that raising the target range for the interest rate might be appropriate if inflation persists above the target level." Following the March meeting, several Fed policymakers indicated a preference for keeping interest rates unchanged while assessing the impact of the war. Overall, policymakers response to the war reflects their concern about the risks of their dual mandate. The minutes stated, "The vast majority of participants believed that both upside risks to inflation and downside risks to employment remained at high levels, and most participants noted that these risks had increased as the situation in the Middle East developed." At the March meeting, Federal Reserve officials maintained the benchmark policy rate in the range of 3.5% to 3.75%.Federal Reserve meeting minutes: The economic outlook of Federal Reserve staff projected that economic activity would be weaker than expected at the January meeting.Federal Reserve meeting minutes: War may slow the decline in inflation as expected.

As a result of hawkish RBA minutes, AUD/JPY surges to around 93.00

Alina Haynes

Feb 21, 2023 15:20

As the Reserve Bank of Australia's minutes revealed a hawkish stance, the AUD/JPY pair surged to near 93.00 during the Tokyo session (RBA). The RBA minutes make it plainly clear that higher interest rates are essential because robust consumer demand prevents the Australian inflation rate from decreasing from its peak.

 

According to the minutes, RBA members considered a 50 basis point (bps) increase in interest rates in light of the persistence of inflation. Members of the RBA also remarked that the unemployment rate is at its lowest point in the past fifty years and that the number of job opportunities is astronomically high, which is a source of happiness for consumers who are injecting surplus income into the economy.

 

Aside from this, the Australian economy benefited from improved trade terms and would benefit more from China's openness than a number of other countries. The Chinese government's relaxation of pandemic laws has expanded Australia's trading potential.

 

Philip Lowe, governor of the Reserve Bank of Australia, anticipates that the cash rate will climb to 3.75 percent over time, with headline inflation decreasing to 4.75 percent by the end of 2023 and returning to approximately 3 percent by the middle of 2025.

 

Previously, S&P Global reported upbeat preliminary Australian PMI (Feb) data. The Manufacturing PMI hit 50.1, above both the consensus forecast of 49.9 and the prior figure of 50.0. The Services PMI increased from 48.4 (estimated) and 48.8 to 49.2. (previously released).

 

About the Japanese Yen, Bank of Japan (BoJ) Governor Haruhiko Kuroda stated, "Due to labor demand and inflation, wage growth is predicted. The Japanese Yen has not notably reacted to the preliminary Jibun Bank PMI (Feb) statistics, which were mixed. The Services PMI has risen to 53.6, surpassing both the consensus expectation of 51.5 and the prior figure of 51.1. While the Manufacturing PMI has declined to 47.4 compared to expectations and the previous reading of 48.9, it remains above the 50-point threshold indicating expansion.


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