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April 17th - According to a Bloomberg survey conducted from April 9th to 15th, the European Central Bank (ECB) is expected to raise interest rates in June due to rising inflation caused by the Iran conflict. However, this 0.25 percentage point hike is likely to be the only such measure, as the conflict is not expected to cause a long-term price shock. The survey shows that the Eurozones inflation rate is expected to rise to 2.8% this year—higher than the previously predicted 2%. It is then projected to fall back to 2.1% by 2026 and further to 2% by 2027—in line with the ECBs target. Sources familiar with the matter indicate that ECB officials currently favor keeping interest rates unchanged at their next meeting at the end of April. Some, including the president of the German central bank, believe that the possibility of action at that time cannot be ruled out.Deutsche Bank expects the Federal Reserve to keep interest rates unchanged in 2026, whereas its previous forecast was for a rate cut in September.Trade sources say Indian banks have suspended imports of gold and silver from overseas suppliers. Due to delays caused by government orders, Indian banks are still awaiting customs clearance for imported gold and silver. Approximately 5 tons of gold and 8 tons of silver are stranded due to lack of customs clearance.The Romanian Ministry of Defense stated that radar detected a Russian drone violating the countrys airspace.The oil crisis triggered by the Iran-Iraq War has led Asian countries to scramble for alternatives. With biofuels now cheaper than fossil fuels for the first time, Asian fuel suppliers are racing to buy them. According to Argus Media, benchmark biodiesel prices in Europe began falling below conventional diesel prices in late March, while Asian palm oil futures prices also fell below diesel prices in early April.

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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